Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method.
On December 31, Year 1, the Loudoun Corporation estimated that 3% of its credit sales of $112,500 would be uncollectible. Loudoun uses the allowance method. On February 15, Year 2, one of Loudoun's customers failed to pay his $1,050 account and the account was written off. On April 4, Year 2, this customer paid Loudoun the $1,050. Which of the following correctly states the effect of Loudoun's recording the reestablishment of the receivable on April 4, Year 2? Rev. - = = Liab. + 1,050 Exp. . 1,050 A. NA Stk. . Equity (1,050) 1,050 (1,050) NA Stmt of Cash Flows NA 1,050 OA Assets NA 1,050 (1,050) NA B. NA 1,050 Net Inc. (1,050) 1,050 (1,050) NA NA NA NA C. D. NA NA 1,050 NA NA NA Multiple Choice C Option A O Option B Option C O Option D
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