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Please solve this problem :) Estimating Bad Debt Expense: Percentage of Sales and Percentage of Ending Accounts Receivable Teton Equipment Company had credit sales of
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Estimating Bad Debt Expense: Percentage of Sales and Percentage of Ending Accounts Receivable Teton Equipment Company had credit sales of $6 million during 2004. Most customers paid promptly (within 30 days) but a few took longer, an average of 1.5% of credit sales were never paid. On December 31, 2004, accounts receivable were $450.000. The Allowance for Bad Debts account had a beginning balance of $80.00 and the write-offs during the year were $81.200. Teton produces and sells mountaineering equipment and other outdoor gear. Most of the sales (about 80%) come in the period of March through August; the other 20% is spread almost evenly over the other six months. Over the last six year, an average of 18% of the December 31 accounts receivable has not been collected. Suppose Teton Equipment uses the percentage of sales method to calculate an allowance for bad debts. Present the accounts receivable and allowance accounts as they should appear on the December 31,2004, balance sheet. Give the journal entry required to recognize the bed debts expense for 2004. Repeat requirement 1 except assume that Teton Equipment uses the percentage of ending accounts receivable method. Estimating Bad Debt Expense: Aging of Accounts Receivable Estimating Bad Debt Expense: Percentage of Sales and Percentage of Ending Accounts Receivable Teton Equipment Company had credit sales of $6 million during 2004. Most customers paid promptly (within 30 days) but a few took longer, an average of 1.5% of credit sales were never paid. On December 31, 2004, accounts receivable were $450.000. The Allowance for Bad Debts account had a beginning balance of $80.00 and the write-offs during the year were $81.200. Teton produces and sells mountaineering equipment and other outdoor gear. Most of the sales (about 80%) come in the period of March through August; the other 20% is spread almost evenly over the other six months. Over the last six year, an average of 18% of the December 31 accounts receivable has not been collected. Suppose Teton Equipment uses the percentage of sales method to calculate an allowance for bad debts. Present the accounts receivable and allowance accounts as they should appear on the December 31,2004, balance sheet. Give the journal entry required to recognize the bed debts expense for 2004. Repeat requirement 1 except assume that Teton Equipment uses the percentage of ending accounts receivable method. Estimating Bad Debt Expense: Aging of Accounts ReceivableStep by Step Solution
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