Entries for Uncollectible Receivables, using Allowance Method Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000 Sept. 30 Received $6,000 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible, Dec. 7 Reinstated the account of Old Town Cate that had been written off on September 30 and received $12,450 cash in full payment, For a compound transaction, if an amount box does not require an entry, leave it blank. May 24-sale May 24-cost Sept. 30 I WII U I ll Dec2.reinstate Dec. 7-collection Nature of Uncollectible Accounts MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, 18) reported accounts receivable of $11,260,000,000 and allowance for doubtfui accounts of $275,000,000 a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM Round your answer to one decimal place % b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Johnson & Johnson. Round your answer to one decimal place c. Possible reasons for the difference in the two ratios computed in () and (b) include: a Casino operators historically lose money on operations. b. Casino operators have larger accounts receivable Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling d. Casino operations experience greater bad debt risk because it is difficult to control the creditworthiness of customers entering the casino. Entries for Uncollectible Receivables, using Allowance Method Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 24 Sold merchandise on account to Old Town Cafe $18,450. The cost of goods sold was $11,000 Sept. 30 Received $6,000 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible, Dec. 7 Reinstated the account of Old Town Cate that had been written off on September 30 and received $12,450 cash in full payment, For a compound transaction, if an amount box does not require an entry, leave it blank. May 24-sale May 24-cost Sept. 30 I WII U I ll Dec2.reinstate Dec. 7-collection Nature of Uncollectible Accounts MGM Resorts International owns and operates hotels and casinos including the MGM Grand and the Bellagio in Las Vegas, Nevada. As of a recent year, MGM reported accounts receivable of $562,947,000 and allowance for doubtful accounts of $89,602,000. Johnson & Johnson manufactures and sells a wide range of healthcare products including Band-Aids and Tylenol. As of a recent year, 18) reported accounts receivable of $11,260,000,000 and allowance for doubtfui accounts of $275,000,000 a. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for MGM Round your answer to one decimal place % b. Compute the percentage of the allowance for doubtful accounts to the accounts receivable for Johnson & Johnson. Round your answer to one decimal place c. Possible reasons for the difference in the two ratios computed in () and (b) include: a Casino operators historically lose money on operations. b. Casino operators have larger accounts receivable Individuals who may have adequate creditworthiness could overextend themselves and lose more than they can afford if they get caught up in the excitement of gambling d. Casino operations experience greater bad debt risk because it is difficult to control the creditworthiness of customers entering the casino
