Problem 6.2 Evaluate the following scenarios, assuming both companies use the accounts receivable method of estimating bad debts expense. 1. At year-end, Vivian Company had accounts receivable of $ 12,000. The allowance for uncollectible accounts has a balance prior to adjustment of $ (600). An aging schedule prepared on December 31 indicates that $ 1,250 of Vivian?s accounts receivable is uncollectible. Net credit sales were $ 110,000 for the year. 2. At year-end, Clausen Company has accounts receivable of $ 24,800. The allowance for uncollectible accounts has a balance prior to adjustment of $ 300. An aging schedule prepared on December 31 indicates that $ 3,300 on Clausen?s accounts receivable in uncollectible. Net credit sales were $ 260,000 for the year. Required: For each situation described above, compute the following: a. The bad debts expense for the year b. The balance in the allowance for uncollectible accounts at year-end c. The net realizable value of accounts receivable at year-end d. Assuming Thompson Company had an accounts receivable balance of $ 75,000 at the beginning of the year, what is Thompson?s accounts receivable turnover ratio for the year? e. Based solely on the data provided, how many days it takes each company to collect its receivables, and which company is doing a better job of collecting its receivables. Explain your answer.
Paper#7778 | Written in 18-Jul-2015Price : $25