The chief accountant maintains that this procedure

Assignment Help Accounting Basics
Reference no: EM131113275

1. Bad-Debt Reporting the chief accountant for Dolly wood Corporation provides you with the following list of accounts receivable written off in the current year. Dolly wood Corporation follows the policy of debiting Bad Debt Expense as accounts are written off. The chief accountant maintains that this procedure is appropriate for financial statement purposes because the Internal Revenue Service will not accept other methods for recognizing bad debts. All of Dolly wood Corporation's sales are on a 30-day credit basis. Sales for the current year total $2,400,000, and research has determined that bad debt losses approximate 2% of sales. 

(a) Do you agree or disagree with Dolly wood's policy concerning recognition of bad debt expense?Why or why not?

(b) By what amount would net income differ if bad debt expense was computed using the percentage of- sales approach? 

1311_11-B-A-C-R (65).PNG

Reference no: EM131113275

Questions Cloud

Prepare the journal entry to record this payment : Prepare the journal entry for Prince's collection of $350,000 of the accounts receivable during the period from April 1, 2010, through June 30, 2010.
The finance company will make the collections : Journalizing Various Receivable Transactions Presented below is information related to Sanford Corp. July 1 Sanford Corp. sold to Legler Co. merchandise having a sales price of $10,000 with terms 2/10, net/60.
Convert number in octal and hexadecimal : Find the gcd of  102 and 222 convert 87 to octal and hexadecimal
Age the balance and specify any items that apparently : Bad Debts-Aging Puckett, Inc. includes the following account among its trade receivables. Age the balance and specify any items that apparently require particular attention at year-end.
The chief accountant maintains that this procedure : Do you agree or disagree with Dolly wood's policy concerning recognition of bad debt expense?Why or why not?
Computing bad debts and preparing journal entries : Computing Bad Debts and Preparing Journal Entries the trial balance before adjustment of Estefan Inc. shows the following balances.
What is the net realizable value of sorter company : What is the net realizable value of Sorter Company's accounts receivable before the write-off of the Ordonez receivable?
Recording bad debts sandel company reports : Recording Bad Debts Sandel Company reports the following financial information before adjustments.
Describe the balance-of-payments identity : Describe the balance-of-payments identity and discuss its implications under the fixed and flexible exchange rate regimes.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Dynamic leaders inc reported the following results for the

dynamic leaders inc. reported the following results for the yearending july 31 2008. retained earnings august

  Evaluating ethics and security within an organization

In this assignment, you will apply the knowledge gained about ethics and security to evaluate security risks and control procedures within your selected organization.

  Carryover basis in an asset

A partnership will take a carryover basis in an asset it acquires when:

  Fixed fee plus a usage charge for using the system

John Roesch Inc. was incorporated in 2013 to operate as a computer software service firm with an accounting fiscal year ending August 31. Roesch's primary product is a sophisticated online inventory-control system; its customers pay a fixed fe..

  Ice mountain company exchanged machinery with an appraised

ice mountain company exchanged machinery with an appraised value of 1755000 a recorded cost of 2700000 and accumulated

  Calculate the breakeven point for the company

Under the new method sales would increase by 15 percent each month, and net income would increase by one third. Fixed cost could be slashed to only $15,000 per month. Calculate the breakeven point for the company before and after the change in mar..

  Tax consequences of the partnership

Justin and Tiffany form the equal TJ Partnership, Justin contributes cash of $20,000 and land (fair market value of $80,000, adjusted basis of $65,000), and Tiffany contributes the assets of her sole proprietorship (value of $100,000, adjusted bas..

  On august 1 2007 a company issues bonds with a par value of

on august 1 2007 a company issues bonds with a par value of 600000. the bonds mature in 10 years and pay 6 annual

  Compute jim overhead using the new product mix

a. Compute Jim's overhead using the new product mix, profit, and contribution margins. b. How could expanding into a product line with higher contribution margin erode the firm's profit margin?

  Income tax on the winnings

The agreement provided that Mock and Tuhi owned the ticket in equal shares. Mock cashed in the ticket, and gave $500,000 to Tuhi. Who owes income tax on the winnings? Did Mock make a gift to Tuhi?

  Abc corp produces alphabet flash cards for grammar schools

abc corp produces alphabet flash cards for grammar schools. they forecast that they will need to produce 90000 sets of

  1 statement of cash flows presentation selected financial

1 statement of cash flows presentation. selected financial statement information and additional data for johnston

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd