Jensen Corporation Uses the Percentage-Of-Sales Method to Estimate Uncollectibles
Jensen Corporation uses the percentage-of-sales method to estimate uncollectibles.Net credit sales for the current year amount to $2,000,000 and management estimates 2% will be uncollectible.The Allowance for Doubtful Accounts prior to adjustment has a debit balance of $16,000.After all necessary adjusting entries are made,the balance in Allowance for Uncollectible Accounts will be:
A company who uses the allowance method,writes-off a receivable of $2,000.Prior to the journal entry,the credit balance in the Allowance for Uncollectible Accounts was $18,432 and Accounts Receivable were $2,000,000.After the entry to write-off the receivable is made,the net realizable value of Accounts Receivable will be:
The balance in Accounts Receivable was $650,000 at the beginning of the year and $750,000 at the end of the year.Credit sales for the year totaled $4,100,000.During the year,$400,000 in customer accounts were written off.How much cash was collected from customers during the period?
Following Generally Accepted Accounting Principles,which method of estimating uncollectible accounts is NOT acceptable?
D)direct write-off method