Question
1/ Oswego Clay Pipe Company sold $46,800 of pipe to Southeast Water District #45 on April 12 of the current year with terms 4/15, n/60.
1/ Oswego Clay Pipe Company sold $46,800 of pipe to Southeast Water District #45 on April 12 of the current year with terms 4/15, n/60. Oswego uses the gross method of accounting for cash discounts.
What entry would Oswego make on June 10, assuming the customer made the correct payment on that date?
Multiple Choice
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Cash 48,672 Accounts receivable 46,800 Sales discounts forfeited 1,872 -
Cash 46,800 Accounts receivable 44,928 Sales discounts forfeited 1,872 -
Cash 46,800 Accounts receivable 44,928 Discounts receivable 1,872 -
Cash 46,800 Accounts receivable 46,800
2/ Calistoga Produce estimates bad debt expense at 0.30% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $479,000 and $1,610 respectively, at December 31, 2017. During 2018, Calistoga's credit sales and collections were $319,000 and $318,000, respectively, and $1,770 in accounts receivable were written off.
Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2018, is:
Multiple Choice
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$1,447.
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$1,682.
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$797.
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$702.
3/ Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $487,000 and $1,470, respectively, at December 31, 2017. During 2018, Calistoga's credit sales and collections were $321,000 and $317,000, respectively, and $1,820 in accounts receivable were written off.
Calistoga's accounts receivable at December 31, 2018, are:
Multiple Choice
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$489,180.
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$481,180.
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$485,180.
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$491,000.
4/ As of January 1, 2018, Farley Co. had a credit balance of $534,000 in its allowance for uncollectible accounts. Based on experience, 2% of Farley's credit sales have been uncollectible. During 2018, Farley wrote off $636,000 of accounts receivable. Credit sales for 2018 were $18,000,000. In its December 31, 2018, balance sheet, what amount should Farley report as allowance for uncollectible accounts?
Multiple Choice
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$258,000.
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$894,000.
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$462,000.
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$360,000.
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