Question
Required information [The following information applies to the questions displayed below.] Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet,
Required information
[The following information applies to the questions displayed below.]
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the companys accountant provides Wanda with the following information, before any adjustment.
Accounts receivable | $ | 10,400,000 | |
Estimated percentage uncollectible | 4 | % | |
Allowance for uncollectible accounts | $ | 104,000 | (credit) |
Operating income | $ | 2,600,000 | |
Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $1,960,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts expectations will also help Wanda keep her job.
Required:
1. Record the adjustment for uncollectible accounts using the accountants estimate of 4% of accounts receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Journal entry worksheet
- Record the adjusting entry for Uncollectible Accounts.
Note: Enter debits before credits.
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