Please show all work. Thank you 14. A company has $235,000 in credit sales. The
ID: 2593359 • Letter: P
Question
Please show all work. Thank you
14. A company has $235,000 in credit sales. The company uses the allowance method to account for uncollectible accounts. The Allowance for Doubtful Accounts now has a $7,250 credit balance. If the company estimates 7% of credit sales will be uncollectible, what is the amount of the journal entry to record estimated uncollectible accounts?
15. Bestway, Inc. had credit sales of $142,000 for the period. The balance in Allowance for Doubtful Accounts is a debit of $643. If Bestway estimates that 2% of credit sales will be uncollectible, what is the required journal entry to record estimated uncollectible accounts?
16. An asset has a cost of $50,000, with a residual value of $10,000. It has a life of 5 years and was purchased on January 1. Under double-declining-balance, what is the asset’s fourth full year of depreciation expense?
17. A truck costing $56,000 has accumulated depreciation of $50,000. The truck is sold for $8,500. What is the journal entry for this transaction?
Explanation / Answer
Answer:
14
the amount of the journal entry to record estimated uncollectible accounts =$16450
Working notes for the answer
estimated uncollectible accounts
=credit sales x % of uncollectible accounts
=235,000 x 7%
=$6450
Description
Debit $
Credit
Bad debt
$ 16,450
Allowance for bad debt
$ 16,450
( 235,000 X 7%)
_______________________________________________________
15
Description
Debit $
Credit %
Bad debt
2840
Allowance for bad debt
$ 2,840
(142000*2%)
________________________________________________________
16
Asset fourth year depreciation = $4,320
Rate
40%
Depreciation
1 year
$ 50,000
$ 20,000
2 year
$ 30,000
$ 12,000
3 year
$ 18,000
$ 7,200
4 year
$ 10,800
$ 4,320
____________________________________________________________
17
Description
Debit $
Credit
Accumulated depreciation
$ 50,000
Cash
$ 8,500
Truck
$ 56,000
Gain on sale of truck
$ 2,500
Description
Debit $
Credit
Bad debt
$ 16,450
Allowance for bad debt
$ 16,450
( 235,000 X 7%)
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