1 answer

Required information The following information applies to the questions displayed below) Suzuki Supply reports the following...

Question:

Required information The following information applies to the questions displayed below) Suzuki Supply reports the following
Required information The following information applies to the questions displayed below) Suzuki Supply reports the following
Required information The following information applies to the questions displayed below) Suzuki Supply reports the following
Required information The following information applies to the questions displayed below) Suzuki Supply reports the following amounts at the end of 2021 before adjustment) Credit Sales for 2021 Accounts Receivable, December 31, 2021 Allowance for Uncollectible Accounts, December 31, 2021 3240,000 35,000 1,200 (Credit) Required: 1. Record the adjusting entry for uncollectible accounts using the percentage of receivables method Suzuki estimates 11% of receivables will not be collected (f no entry is required for a particular transaction/event, select "No Journal Entry Required in the first account field.) View transaction list View journal entry worksheet No General Journal Debit Credit Date December 31, 2021 Bad Deot Expense Allowance for Uncollectible Accounts < Prey 13 14 15 of 17 Next >
Required information The following information applies to the questions displayed below) Suzuki Supply reports the following amounts of the end of 2021 (before adjustment) Credit Sales for 2021 Accounts Receivable, December 31, 2021 Allowance for Uncollectible Accounts, December 31, 2021 $240,000 35,000 1,200 (Credit) 2. Record the adjusting entry for uncollectible accounts using the percentage of credit sales method. Suzuki estimates 3% of credit sales will not be collected. (If no entry is required for a particular transaction/event, select 'No Journal Entry Required in the first account field.) View transaction list View journal entry worksheet No Date General Journal Debit Credit
Required information The following information applies to the questions displayed below) Suzuki Supply reports the following amounts at the end of 2021 (before adjustment) Credit Sales For 2021 Accounts Receivable, December 31, 2021 Allowance for Uncollectible Accounts, December 31, 2021 $240,000 35,000 1,200 (Create 3. Calculate the effect on net income before taxes) and total assets in 2021 for each method Suzuki estimates 1976 of receivables and 396 of credit sales respectively will not be collected Percentage of Receivables Method Percentage of Credit Sales Method Total assets Net income

Answers

1. 11% of receivables :
Allowance for uncollectible accounts for year ended 31/12/2021 = 35,000*11% = 3850
Allowance for uncollectible accounts already recognized = 1200
Hence, further allowance to be recorded = 3850-1200 = 2650
No. Date General Journal Debit Credit
1 December 31, 2021 Bad Debt expense a/c ..Dr                                 2,650
To Allowance for Uncollectible Accounts                                  2,650
2. 3% of Credit sales
Allowance for uncollectible accounts for year ended 31/12/2021 = 240000*3% = 7200
Allowance for uncollectible accounts already recognized = 1200
Hence, further allowance to be recorded = 7200-1200 = 6000
No. Date General Journal Debit Credit
2 December 31, 2021 Bad Debt expense a/c ..Dr                                 6,000
To Allowance for Uncollectible Accounts                                  6,000
3. Effect on net income and Total assets under both methods
Percentage of Receivables Method Percentage of Credit Sales Method
Before After Effect/change Before After Effect/change
Total Assets (Accounts receivable net of Allowance a/c) 33800 31150 -2650 33800 27800 -6000
Net Income 240000 237350 -2650 240000 234000 -6000
.

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