Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

HOW DID I GET CREDIT LOSSES WRONG WHAT WOULD BE THE CORRECT NUMBER Sunland Ltd. has been in business for several years and has the

image text in transcribedimage text in transcribed

HOW DID I GET CREDIT LOSSES WRONG

WHAT WOULD BE THE CORRECT NUMBER

Sunland Ltd. has been in business for several years and has the following information for its operations which ended December 31 , 2024: 1. Total sales for the year were $3,550,000, of which 60% were on account. 2. The company estimates that total expected credit losses at December 31, 2024 will be $95,850. 3. Sunland Ltd. began the year with $640,000 in accounts receivable and a normal credit to the allowance for expected credit losses of $83,000. 4. Sunland Ltd. writes off customer accounts that have been outstanding for more than 120 days. During the year, accounts with a carrying amount of $76,000 reached the 120 -day mark and were written off. 5. The company uses a collection agency to try to collect accounts that have been written off. The collection agency was able to collect $26,000 from customers whose accounts had previously been written off. 6. During the year the company collected $1,770,000 of its accounts receivable. Account Titles and Explanation Debit Credit Accounts Receivable 2130000 Sales Revenue (To record credit sales) Credit Losses \begin{tabular}{||r||} \hline 95850 \\ \hline \hline \end{tabular} Allowance for Expected Credit Losses 95850

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: 3

blur-text-image

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

Introduction To Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen

4th Edition

0073379352, 9780073379357

More Books

Students also viewed these Accounting questions

Question

6.7 Discuss strategies for recruiting a more diverse workforce.

Answered: 1 week ago