Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On August 31, 2018, Daisy Floral Supply had a $165,000 debit balance in Accounts Receivable and a $6,600 credit balance in Allowance for Bad Debts.
On August 31, 2018, Daisy Floral Supply had a $165,000 debit balance in Accounts Receivable and a $6,600 credit balance in Allowance for Bad Debts. During September, Daisy made:
Sales on account, $560,000. Ignore Cost of Goods Sold.
Collections on account, $598,000.
Write-offs of uncollectible receivables, $6,500.
. | Using the same facts, assume that Daisy used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad Debts Expense, and show their balances at September 30, 2018. |
3. | What amount of Bad Debts Expense would Daisy report on its September income statement under each of the two methods? Which amount better matches expense with revenue? Give your reason. |
4. | What amount of net accounts receivable would Daisy report on its September 30, 2018, balance sheet under each of the two methods? Which amount is more realistic? Give your reason. |
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