Date Name Class 210 EXAM 2 S1,500,000 60,000 250,000 Sales ( 100% on credit) Sal

Question

Date Name Class 210 EXAM 2 S1,500,000 60,000 250,000 Sales ( 100% on credit) Sales returns Accounts receivable (December 31, 2017) Allowance for doubtful accounts (credit balance) (before adjustment at December 31, 2017) Estimated amount of uncollectible accounts based on an aging analysis 3,000 31,000 15. Refer to the data for Mellon Corporation. ul IfMellon uses 2% of net credit sales to estimate its bad debts, what will be the balance in the Allowance for Doubt Accounts account after the adjustment for bad debts? a. $33,000 b. $31,800 c. $27,000 d. $25,800 Cheswick Corp. The following information is for Cheswick Corp. at the end of 2017: Sales Sales returns and allowances Accounts receivable-December 31, 2017 Allowance for doubtful accounts -December 31, 2017 $800,000 8,000 175,000 (credit balance) (before adjustment for bad debts) 1,000 Estimated uncollectible accounts (per aging schedule at December 31, 2017) 7,500 16. Refer to the data for Cheswick Corp...1001S lfbad debts are estimated at 1% of net sales, how much will Cheswick Corp. report as bad debts expense for 2017? Sliders Company Sliders Company sells its merchandise only on credit. The following data are available at December 31, 2017: ales ales returns and allowances ccounts receivable-January 1, 2017 $375,000 12,000 60.600 C0,600 llowance for doubtful accounts-January 1, 2017 sh collections during 2017 counts written off as uncollectible during 2017 3,200 362,500 2,400

Explanation / Answer

Mellon Corporation :

15. b. $ 31,800

Net Sales = $ 1,500,000 - $ 60,000 = $ 1,440,000.

Bad debt expense = $ 1,440,000 x 2% = $ 28,800.

Allowance for Doubtful Accounts balance after adjustment = $ 3,000 + $ 28,800 = $ 31,800.

Cheswick Corporation :

16. Net Sales = $ 800,000 - $ 8,000 = $ 792,000.

Bad debt expense = $ 792,000 x 1 % = $ 7,920.

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