Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Flappable Company began operations on January 1, 2017. The entity provided for doubtful accounts based on 5% of the annual credit sales in prior years.

image text in transcribed

Flappable Company began operations on January 1, 2017. The entity provided for doubtful accounts based on 5% of the annual credit sales in prior years. On January 1, 2020, the entity changed the method of determining the allowance for doubtful accounts using the aging schedule. Credit sales Collections excluding recovery Accounts written off during year Recovery of accounts written off 2020 15,000,000 11,700,000 200,000 100,000 2019 9,500,000 8,200,000 120,000 40,000 2018 8,000,000 6,700,000 80,000 35,000 2017 6,000,000 4,500,000 None None Days Account Outstanding 30 days or less Between 31 and 60 days Between 61 and 180 days Between 181 and one year Over one year to be written off Amount 3,000,000 1,500,000 1,200,000 1,200,000 100,000 Probability of collection 95% 80% 75% 50% 0% What amount should be reported as an allowance for doubtful accounts on December 31, 2020? 1,350,000 1,450,000 1,250,000 1,000,000 What amount should be reported as doubtful accounts expense for the currentyear? 500,000 600,000 700,000 400,000 What is the net realizable value of accounts receivable on December 31, 2020? 6,900,000 7,000,000 5,550,000 5,650,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John Wild, Ken Shaw

6th Edition

ISBN: 9781259726972

More Books

Students also viewed these Accounting questions

Question

Describe why intercultural communication is a necessity

Answered: 1 week ago