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Category > Business & Finance Posted 09 Dec 2017 My Price 10.00

ACCT: 2100 Fall 2016 Chapter 6 Take-Home Quiz

Following are the monthly sales, collections and bad debt write-offs for Envirocare Equipment, Inc. for 2015. Assume all sales are credit sales.

 

Month

Cash Collections Credit Sales Write-Offs January $100,000 $75,000 February 105,000 83,000 $4,500 March 91,000 85,000 April 100,000 97,000 5,000 May 87,500 95,000 June 108,000 115,000 July 95,000 125,000 3,500 August 101,100 98,000 September 110,500 101,000 3,000 October 98,000 120,000 November 110,000 107,000 December 76,500 100,000 2,500 Total $1,182,600 $1,201,000 $18,500

 

Envirocare’s controller prepared the following aging of accounts receivable as of December 31, 2015:

Account Classification Balance Percent Uncollectable Current $90,000 1% 1-30 days past due 47,000 5% 31-60 days past due 16,000 10% 61-90 days past due 9,000 20% Over 90 days past due 10,000 25%

 

The allowance for doubtful accounts balance on January 1, 2015 was $8,900.

Required:

 

1. Envirocare records bad debt expense at 2% of credit sales during the year. Prepare a trial balance at December 31, 2015 with additional columns for adjustments and the adjusted trial balance. You need only show the accounts related to accounts receivable.

2. Envirocare uses an aging of accounts receivable to determine the final numbers for the financial statements. Post any adjusting journal entries necessary to adjust from the percentage of sales estimates to the year-end aging numbers. Prepare the trial balance and prepare the relevant portions of the adjusted trial balance. 3. Show what Envirocare would have reported on its 2014 and 2015 balance sheet related to receivables. 4. Show what Envirocare would have reported on its 2015 income statement related to receivables. 5. Show what Envirocare would have reported on its 2015 statement of cash flow under both the direct and indirect methods related to receivables.

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CourseLover
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Status NEW Posted 09 Dec 2017 02:12 PM My Price 10.00

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