1. Extreme Sport, Inc. uses the allowance method to account for bad debts. During 2010, the company recorded $560,000 in credit sales. At the end of 2010 before adjustments, account balances were accounts receivable $180,000, and allowance for uncollectible accounts, ($900). If bad debt expense is estimated to be 3% of credit sales, how much bad debts expense will be on that year-end income statement?
2. A company started the year with accounts receivable of $15,000 and an allowance for uncollectible accounts of $ ($1,500). Duiring the year, sales (all on account) were $110,000 and cash collections for sales amounted to $105,000. Also, $1,000 worth of uncollectible accounts were specifically identified and written off. Then, at year end, the company estimated that 10% of ending accounts receivable would be uncollectible.
a) What amount will be shown on the year-end income statement for bad debts expense?
b) What is the balance in the allowance for uncollectible accounts after all adjustments have been made?
3. Quality Suppliers Inc. accepts cash or credit card payments from customers.Durning June, Quality provided $170,000 worth of supplies to customers who used Discovered cards to pay for their purchases. Discover charges Quality suppliers 3% of sales for card services. How will Quality Suppliers record these sales?
4. Ross Company had the following balances:
Receivables, net (Dec, 31,2010) $200,000
Recievables, net (dec,31,2019) $250,000
Sales (all credit) (Dec,31,2010) $1,600,000
Sales (all credit) (Dec,31,2019)$1,000,000
a) Calculate the accounts receivable turnover ratio for 2010
b) Calculate the average number of days to collect?