[The following information applies to the questions displayed below.] The follow

Question

[The following information applies to the questions displayed below.] The following data were selected from the records of Sykes Company for the year ended 2014. January 1, 2014 Accounts recelvable (various customers)117000 9,000 Allowance for doubtful accounts In the following order, except for cash sales, the company sold merchandise and made collections terms 5/10, n/30 (assume a unit sales sales revenue). on credit price of $500 in all transactions and use the gross method to record Transactions during 2014 a. Sold merchandise for cash, $236,000 b. Sold merchandise to R. Smith; invoice price, $10,000. c. Sold merchandise to K. Miller; invoice price, $25,000 d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit e. Sold merchandise to B. Sears; invoice price, $29,000 f. R. Smith paid his account in full within the discount period. g. Collected $89,000 cash from customer sales on credit in prior year, all within the discount perlods h. K. Miller paid the invoice in (c) within the discount period. l. Sold merchandise to R. Roy; invoice price. $23,500 , three days after paying the account in full, K. Miller returned seven defective units and received a cash refund k. After the discount period, collected $4.000 cash on an account receivable on sales in a prior year l. Wrote off a 2013 account of $3,000 after deciding that the amount would never be collected m. The estimated bad debt rate used by the company was 10 percent of credit sales net of returns

Explanation / Answer

SALES

323500

LESS DISC AND RETURNS

6234

LESS RETURNS

3325

500

3825

313441

BAD DEBTS

4264

309177

SALES

Discounts

Returns

/allowances

Bad debts

A

236000

B

10000

C

25000

D

500

E

29000

F

475

g

4684

H

1250

I

23500

-175

3325

J

K

L

3000

M

1264

n

323500

6234

3825

4264

309177

SALES

323500

LESS DISC AND RETURNS

6234

LESS RETURNS

3325

500

3825

313441

BAD DEBTS

4264

309177

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