Answered step by step
Verified Expert Solution
Question
1 Approved Answer
EXERCISE: PERCENTAGE OF CREDIT SALES METHOD Summary: Annual Credit Sales and Collections 3rd STEP FYE 2009 FYE 2011 FYE 2012 3,925,000 5,100,000 20,000,000 22,500,000 75,000)
EXERCISE: PERCENTAGE OF CREDIT SALES METHOD Summary: Annual Credit Sales and Collections 3rd STEP FYE 2009 FYE 2011 FYE 2012 3,925,000 5,100,000 20,000,000 22,500,000 75,000) (21,940,000) 50,000) 1250,000) ,410,000 Begninning Balance A/R 3,080,000 5,000,000 12,500,000 15,000,000 (10,500,000) (16,000,000) (18,7 Credit Sales Collections on AMR Direct Charge offs 5,100,000 Ending Balance A/R Allowance for Doubtful Accounts 5,000,000 124,900 3,925,000 Net Realizable Value 2nd Step: Allowance for Doubtful Accounts Total Accounts Receivable Beginning Balance Less: Write Offs Add: Bad Debt Expense Total Allowance Account 2nd STEP fve 2009e 2010fye 2011 fye 2011fye 2012 92.400 (80,000) 500 124,900 124,900 1st Step: Calculation of Allowance: 0.9% of Credit Sales 1st STEP Credit Sales 12 Bad Debt Expense 0.9% 112,500 EXERCISE: PERCENTAGE OF RECEIVABLES METHOD Annual Breakdown of Credit Sales and Collections FYE.2009 FYE.2010 FYE 2012 Begninning Balance A/R Credit Sales Collections on A/R Direct Charge offs Ending Balance A/R Allowance for Doubtful Accounts Net Realizable Value 3,080,000 5,000,000 12,500,000 15,000,000 3,925,000 5,100,000 20,000,000 22,500,000 (10,500,000) (16,000,000) 18,775,000) (21,940,000) 50,000) (250,000) 5,410,000 (80,000) (75,000 5,000,000 5,100,000 3% 150,000 1st STEP 4,850,000 Allowance for Doubtful Accounts Total Accounts Receivable Beginning Balance Less: Write Offs Add: Bad Debt Expense Total Allowance Account 2012 92,400 (80,000) 137,600 150,000 150,000 2nd STEP
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started