OSU ACCTMIS 2300 - 212SEMAccountsReceivablem7 (9 pages)

Previewing pages 1, 2, 3 of 9 page document View the full content.
View Full Document

212SEMAccountsReceivablem7



Previewing pages 1, 2, 3 of actual document.

View the full content.
View Full Document
View Full Document

212SEMAccountsReceivablem7

165 views


Pages:
9
School:
Ohio State University
Course:
Acctmis 2300 - Introduction to Accounting II

Unformatted text preview:

AMIS 212 Introduction to Accounting II Accounts Receivable Module 7 Slide 1 1 MODULE 1 Accounts CHAPTER Receivable Module 7 Introduction to Accounting II Professor Marc Smith Hi everyone Now that we ve gone through a basic example of how to estimate bad debt expense let s take a look at one that s a little more complicated Take a look at example number 4 from our website problems Let s just read it together It says Grandma Veezy s House of Fun has compiled the following information to determine its year end estimate of bad debt expense And you can see the information they ve given us They ve given us the sales All sales were on account were on credit They tell us sales returns and allowances They give us the accounts receivable balance at the end of the year They tell us the allowance for doubtful accounts at the beginning of the year They tell us the amount of accounts receivable that were written off during the year as well as the recoveries the accounts receivable that had been previously written off but were then collected AMIS 212 Marc Smith 1 AMIS 212 Introduction to Accounting II during the current year And part A says let s assume Grandma Veezy is using the net credit sales method and she has estimated her bad debt expense to be 4 of her net credit sales Requirement 1 calculate her bad debt expense for the year AMIS 212 Marc Smith 2 AMIS 212 Introduction to Accounting II Slide 2 Accounts Receivable Module 7 Part A Net Credit Sales Method 1 Bad debt expense 500 000 x 04 Net credit sales x NOT CORRECT Bad debt expense 500 000 18 000 x 04 Bad debt expense 19 280 Here s what we know When using the net credit sales method the bad debt expense is the net credit sales multiplied by the percentage expected to be uncollectable And at first this seems like it will be a real easy one to answer What a lot of us would do would be to take the sales amount of 500 000 multiply by 4 the percentage expected to be uncollectable and we would say our bad debt expense is 20 000



View Full Document

Access the best Study Guides, Lecture Notes and Practice Exams

Loading Unlocking...
Login

Join to view 212SEMAccountsReceivablem7 and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view 212SEMAccountsReceivablem7 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?