Refer to exercise E5-21. Exercise 5-21 On June 30, 2014, Perfect Party Planners (PPP) had a $40,000
Question:
Refer to exercise E5-21.
Exercise 5-21
On June 30, 2014, Perfect Party Planners (PPP) had a $40,000 balance in Accounts Receivable and a $3,000 credit balance in Allowance for Uncollectible Accounts. During July, PPP made credit sales of $75,000. July collections on account were $60,000, write-offs of uncollectible receivables totalled $2,200, and an account of $1,000 was recovered. Bad debt expense is estimated as 2% of revenue.
Requirements
1. Record bad debt expense for July by the direct write-off method.
2. What amount of accounts receivable would Perfect Party Planners (PPP) report on its July
31 balance sheet under the direct write-off method? Does PPP expect to collect the full amount?
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
1 2 Net accounts receivable would be 52800 the balance in Accounts ...View the full answer
Financial Accounting
ISBN: 978-0133472264
5th Canadian edition
Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin
