User Account

All Pages

What amount would net income differ

Assignment Help Financial Accounting
Reference no: EM132678932

The chief accountant for Dickinson Corporation provides you with the following list of accounts receivable that were written off in the current year:

Date: Customer: amount:

march 31 eli masters ltd. $7,700
june 30 crane associates $6,800
sept 30 annie lowell's dress shop $12,000
dec 31 vahik uzerian $6,830

  • Dickinson 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.
  • All of Dickinson Corporation's sales are on a 30-day credit basis, and the accounts written off all related to current year sales. Sales for the year total $3.2 million, and your research suggests that bad debt losses approximate 2% of sales.

Instructions

Problem (a) Do you agree with Dickinson Corporations policy on recognizing bad debt expense? Why?

Problem (b) By what amount would net income differ if bad debt expense was calculated using the allowance method and percentage-of-sales approach?

Problem (c) Under what conditions is using the direct write-off method justified?

Reference no: EM132678932

Questions Cloud

Which types of information are not required to be disclosed : Which of the following types of information are not required to be disclosed by management in a note disclosure when preparing financial reports?
Media react to the actions of the federal government : How did individual states and the media react to the actions of the federal government? Be specific, and cite examples.
What is the amount of owner equity at the end of the year : If total assets increased 250.000 TL during the year, and total liabilities decreased 100.000 TL, what is the amount of owner's equity at the end of the year?
Describe the common types of scenario planning : Contingency planning is a risk mitigation process for developing back-up plans in anticipation of events (scenarios) that might disrupt ‘business as usual'.
What amount would net income differ : What amount would net income differ if bad debt expense was calculated using the allowance method and percentage-of-sales approach?
Calculate the accumulated amount of end-of-month payments : Calculate the accumulated amount of end-of-month payments of $3,500 made at 5.18% compounded quarterly for 7 years.
Effective city planning and innovative planning practices : Discuss the key components and players involved in effective city planning and innovative planning practices.
Why is it so difficult to prosecute cybercriminals : Internet-related crime occurs every minute. Cybercriminals steal millions of dollars with near impunity. For everyone that is captured nearly 10,000.
Prepare the journal entry resulting for the tiny division : Joshua In and accounts for their property plant & equipment. Prepare the journal entry resulting for the Tiny Division and calculate any impairment loss.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate the times interest earned ratio

Sales are $1.5 million, cost of goods sold is $600,000, depreciation expense is $150,000, other operating expenses is $300,000, addition to retained earnings is $146,250, dividends per share is $1, tax rate is 30 percent, and number of shares of comm..

  Find what is the amount of riverwood ltd annual depreciation

Find What is the amount of Riverwood Ltd's annual depreciation expense? The interest rate implicit in the lease for Riverwood Ltd is 5%.

  Financial accounting

statements most accurately describes financial accounting’s view of period costs.

  When recording the journal entry for labor

When recording the journal entry for labor, the goods in process inventory account is.

  Better care clinic-breakeven analysis

Fairbanks Memorial Hospital, an acute care hospital with 300 beds and 160 staff physicians, is one of 75 hospitals owned and operated by Health Services of America, a for-profit, publicly owned company. Although there are two other acute care hospita..

  Why would managers be concerned about the new overhead rate

What effect would this new rate have on the cost of jobs that do not use the new automated milling machine and why would managers be concerned about the new overhead rate?

  Describe the extractor machine is an item of property

If the extractor machine is an asset, further describe if the extractor machine is an item of property, plant and equipment in accordance with MFRS

  Elucidate the amount of this inventory

Based on the preceding information, will Jarman report finished goods inventory on its balance sheet for Contract 1? If so, elucidate the amount of this inventory? If not, explain why not.

  Wholesale distributor of electronic equipment

a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement,

  Solve the past service costs included in net pension expense

Zenith Company, a calendar-year entity, Solve the past service costs included in 2019 net pension expense (or revenue) under IAS 19.

  Aspects would not be included in the social category

Which of the following aspects would not be included in the Social category of the GRI G4 reporting? guidelines?

  Why are inventories valued at the lower-of-cost-or market

Why are inventories valued at the lower-of-cost-or market? What are the arguments against the use of the LCM method of valuing inventories?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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