ACCT 201 Case Fall 2020 Page 6 Question 51 on November 30, Walker Agency has accounts receivable of $194,000 and a credit balance of $6,000 in Allowance for Doubtful Accounts a. What is the cash (net) realizable value on November 30? b. On December 31, the accounts receivable balance is $500,000 and Allowance for Doubtful Accounts is $5,000. Walker uses the percentage of receivables method to determine uncollectible receivables Management estimates that 2% of receivables will not be collected. For what amount would the adjustment be to record the estimate of uncollectible accounts? c. What would the balance in Allowance for Doubtful Accounts be after the above adjustment on December 31 d. What account would be debited to record the adjustment in part (b) above? e. During January of the following year, a customer's $7.000 account is written off. What account would be debited to record this transaction? f. What is cash (net) realizable value on January 31, 2021, after the write off? f. On what financial statement will each of the following be reported: (1) Bad Debt Expense (2) Allowance for Doubtful Accounts (3) Accounts Receivable ACCT 201 Case Fall 2020 Page 4 Question 3: Hilda Company reports the following information regarding merchandise inventory for March. Assume Hilda uses the periodic system and that 250 units of merchandise were on hond on March 31. Date March 1 March 9 March 16 March 28 Explanation Inventory Purchase Purchase Purchase Units 200 300 400 100 Unit Cost $50 60 70 80 Total.com $10,000 18,000 28.000 8.000 a What is the cost of goods available for sale for March? 1000 b How many units of inventory were available for sale during March? What is the cost of ending Inventory under FIFO? How much is cost of goods sold under LIFO? If Hildo Company has soles of $80,000 in March and uses the weighted average method, how much is the gross profit for March? Show your calculations in the space below. ACCT 201 Case Fall 2020 Page 6 Question 51 on November 30, Walker Agency has accounts receivable of $194,000 and a credit balance of $6,000 in Allowance for Doubtful Accounts a. What is the cash (net) realizable value on November 30? b. On December 31, the accounts receivable balance is $500,000 and Allowance for Doubtful Accounts is $5,000. Walker uses the percentage of receivables method to determine uncollectible receivables Management estimates that 2% of receivables will not be collected. For what amount would the adjustment be to record the estimate of uncollectible accounts? c. What would the balance in Allowance for Doubtful Accounts be after the above adjustment on December 31 d. What account would be debited to record the adjustment in part (b) above? e. During January of the following year, a customer's $7.000 account is written off. What account would be debited to record this transaction? f. What is cash (net) realizable value on January 31, 2021, after the write off? f. On what financial statement will each of the following be reported: (1) Bad Debt Expense (2) Allowance for Doubtful Accounts (3) Accounts Receivable ACCT 201 Case Fall 2020 Page 4 Question 3: Hilda Company reports the following information regarding merchandise inventory for March. Assume Hilda uses the periodic system and that 250 units of merchandise were on hond on March 31. Date March 1 March 9 March 16 March 28 Explanation Inventory Purchase Purchase Purchase Units 200 300 400 100 Unit Cost $50 60 70 80 Total.com $10,000 18,000 28.000 8.000 a What is the cost of goods available for sale for March? 1000 b How many units of inventory were available for sale during March? What is the cost of ending Inventory under FIFO? How much is cost of goods sold under LIFO? If Hildo Company has soles of $80,000 in March and uses the weighted average method, how much is the gross profit for March? Show your calculations in the space below
