a) prepare a Finansial statements effect template entry to record accounts recei

Question

a) prepare a Finansial statements effect template entry to record accounts receivable written off as uncollectible in 2012

Also prepare the FSET entry to record the provision for doubtful accounts (dab debts expense) for 2012. What effect did these entries have on income for that year?

b) Calculate gross receivables for the years given, and then determine the allowance for doubtful accounts as a percentage of the gross receivables.

2012 2011 from the income statement: Net sales 729373 678960 from the balance sheet: Accounts receivable, net 14919 15036 Customer deposits 65465 62649 from the disclosure on Allowance fro doubdful accounts: Balance at the beginning of period 1171 1160 Additions (reductions) charged to income 9 11 Adjustments or deductions -70 0 Balance at the end of period 1110 1171

Explanation / Answer

Income Statement 2012 2011 Net Sales 729373 678960 Accounts Receivables 14919 15036 Doubtful Accounts 1110 1171 Net receivables 13809 13865 Doubtful accounts/Gross Receivables 0.074402 0.07788

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