Purchase Solution

Percent of revenue allowance method of accounting

Not what you're looking for?

Ask Custom Question

1. Determining account balance: percent of revenue allowance method of accounting for uncollectible accounts

The following information pertains to Leslie's Floor Store sales on account and accounts receivable

Accounts receivable balance, January 1, 2012: $52,500
Allowance for doubtful accounts, January 1, 2012: 4,725
Sales on account, 2012: 925,000
Cost of goods sold, 2012: 615,000
Collections of accounts receivable, 2012: 835,000

After several collection attempts, Leslie's wrote off $3,100 of accounts that could not be collected. Leslie estimates that bad debts expense will be 0.5 percent of sales on account.

Required:
A. Compute the following amounts. 1.) using the allowance method, the amount of uncollectable accounts expense for 2012.

2.) Net realizable value of receivables at the end of 2012.

B. Explain why the uncollectable accounts expense amount is different from the amount that was written off as uncollectible.

2. O' Brian service Company purchased a copier on January 1, 2012 for 17,000 and paid an additional $200 for delivery chargers. The copier was estimated to have a life of four years or 800,000 copies. Salvages was estimated at $1200. The copier produced 230,000 copies in 2012 and 250,000 copies in 2013.

Required
Compute the amount of depreciation expense for the copier for calendar years 2012 and 2013 using these methods:

a. Straight line
b. Units- of -production
c. Double- declining balance

Purchase this Solution

Solution Summary

Solution discusses the percent of revenue allowance method of accounting for uncollectible accounts

Purchase this Solution


Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.