C3 Cinta Enterprise has the following balances on 1 January 2016 Question 19 Not yet answered Accounts receivable RM12,500 (Debit) Marked out of 1.00 Allowance for doubtful debts RM400 (Credit) u0For the year ended 31 December 2016, the following information were obtained P Flag question Total sales RM100,000 (including cash sales RM30,000) Payment by debtors RM52,500 Return by debtors RM3,000 Bad debts RM1,000 It is the business policy to provide 2% allowance for doubtful debts on the outstanding accounts receivable at the end of the year What is the ending balance of allowance for doubtful debts as at 31 December 2016?? Select one: O a. RM520 O b. RM1,150 O c. RM690 O d. RM650 Show transcribed image text C3 Cinta Enterprise has the following balances on 1 January 2016 Question 19 Not yet answered Accounts receivable RM12,500 (Debit) Marked out of 1.00 Allowance for doubtful debts RM400 (Credit) u0For the year ended 31 December 2016, the following information were obtained P Flag question Total sales RM100,000 (including cash sales RM30,000) Payment by debtors RM52,500 Return by debtors RM3,000 Bad debts RM1,000 It is the business policy to provide 2% allowance for doubtful debts on the outstanding accounts receivable at the end of the year What is the ending balance of allowance for doubtful debts as at 31 December 2016?? Select one: O a. RM520 O b. RM1,150 O c. RM690 O d. RM650
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The Septemberâ30,2017â,records of Perfecto Communications include theseâ accounts:
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . | $250,000 |
Allowance for Doubtful Accounts . . . . . . . . . . . . . . . . . . . | (8,300) |
During theâ year,
Perfecto Communications estimatesâ doubtful-account expense atâ 1% of credit sales. Atâ year-end (Decemberâ 31), the company ages its receivables and adjusts the balance in the Allowance for Doubtful Accounts to correspond to the aging schedule. During the last quarter of 2017â, the company completed the following selectedâ transactions:
Nov 30 | Wrote off as uncollectible the $1,300 account receivable from Brown Carpets and the $400 account | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
receivable from Priceless Antiques. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dec 31 | Adjusted the Allowance for Doubtful Accounts and recorded doubtful-account expense at year-end, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
based on the aging of receivables.
Requirement 1. Record the transactions for the last quarter of 2017 in the journal. Explanations are not required. â(Record debitsâ first, then credits. Exclude explanations from any journalâ entries.) Wrote off as uncollectible the $1,300 account receivable from Brown Carpets and the $400 account receivable from Priceless Antiques .
Adjusted the Allowance for Doubtful Accounts and recordedâ doubtful-account expense atâ year-end, based on the aging of receivables.
Requirement 2. Prepare aâ T-account for Allowance for Doubtful Accounts with the appropriate beginning balances. Post the entries from Requirement 1 to that account. Open theâ T-account by posting the beginning balance. Then post the entries to the Allowance for Doubtful Accountsâ T-account and calculate the ending balance.
2016 and2017 . Use theâ three-line reporting format. AtDecember â31,2016 â, theâ company's Accounts Receivable balance was$ 213 comma 000 â, and the Allowance for Doubtful Accounts stood at$ 4 comma 700 .
Choose from any list or enter any number in the input fields and then continue to the next question. |
Question 14 pts
The five components to a system of internal controls include all of the following except:
control procedure |
risk assessment |
safeguarding assets |
monitoring controls |
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Question 24 pts
An automobile company testing brakes on new vehicles is part of:
control procedure |
risk assessment |
information systems |
monitoring controls |
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Question 34 pts
Which account would we debit to open a new petty cash fund?
cash |
petty cash |
miscellaneous expense |
petty cash expense |
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Question 44 pts
Our company established a petty cash fund with a balance of $200. We have petty cash receipts for travel expenses that total $125. We have counted petty cash and found that we were $2 short. Which of the following would be included in the entry to replenish the fund?
a credit to petty cash for $127 |
a debit to travel expenses for $125 |
a credit to cash over and short for $2 |
a credit to cash for $125 |
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Question 54 pts
On a bank reconciliation, which of the following will not appear as a deduction on a bank statement?
deposit |
NSF check (non-sufficient funds) |
service charge |
Payments made by EFT (electronic fund transfer) |
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Question 64 pts
Our company received a bank statement with a balance of $10,000. The reconciling items include outstanding checks that totaled $2,000 and a deposit in transit of $1,000. What is the adjusted bank balance after we complete the bank reconciliation?
$7,000 |
$9,000 |
$11,000 |
$13,000 |
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Question 74 pts
Our company has decided to write off an uncollectible account of $3,000. What account would we credit to record bad debt expense if our company uses the direct write-off method for bad debts?
bad debt expense |
accounts receivable |
allowance for doubtful accounts |
cash |
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Question 84 pts
Where does allowance for doubtful accounts appear on our financial statements?
on balance sheet as a current liability |
on income statement as part of cost of goods sold |
on balance sheet as a contra asset related to accounts receivable |
on the statement of retained earnings as a deduction from net income |
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Question 94 pts
At the end of 2018, we have a credit balance of $10,000 in allowance for doubtful accounts before the adjusting entry for bad debts expense. The company uses the percentage of sales method to estimate bad debt expense. The company estimates that 3% of net credit sales will be uncollectible for the year. Net credit sales for the year amounted to $1,000,000. What account and amount would we debit to record the adjusting entry for bad debt expense?
bad debt expense, $30,000 |
allowance for doubtful accounts, $30,000 |
bad debt expense, $20,000 |
accounts receivable, $20,000 |
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Question 104 pts
On July 1, 2017, our company accepts a 9-month 5% note for $12,000. What account and amount would we debit when we record the year-end adjusting entry on December 31, 2017?
interest revenue, $300 |
interest revenue, $350 |
interest receivable, $300 |
interest receivable, $350 |
Background: This is a continuation of theactivities at TECHNOGYM in January, 2017. As in past activities,TECHNOGYM uses a Jan. 1 â Dec. 31 financial year.
Exercise for Accounts Receivable:
TECHNOGYM management does not expect there to be any change inthe collectability of its credit sales related to its normaloperations. On Dec. 31, 2016, the unadjusted balance of theAccounts Receivable balance was $17,607,500 and the Allowance forDoubtful Accounts balance was $20,000 (credit). TECHNOGYM uses theAccounts Receivable approach to estimate bad debts. The agingschedule at Dec. 31, 2016 is summarized below:
Days outstanding | % of Accts Rec | Est. % Uncollectible |
0-30 days | 40% | 0.3% |
30-60 days | 35% | 0.8% |
60-90 days | 15% | 10.0% |
>90 days | 10% | 30.0% |
Requirement 1: Develop an aging schedule to show yourcalculations of the total expected uncollectible amount for2016.
Days Outstanding | % of Accts Rec | $ of Accts Rec | Est. % Uncollectible | Est. $ Uncollectible | |
Total $Uncollectible |
Requirement 2: Show your calculation of the appropriatedollar amounts, then show the adjusting journal entry (if any) thatis needed on Dec. 31, 2016 related to this issue. Remember toshow the journal entry in proper form!
Requirement 3: TECHNOGYM on May 1st , 2017learns that another customer went bankrupt and this customerâsoutstanding accounts receivable balance at Dec. 31 2016 is 900,000.Does TECHNOGYM need to record a journal entry for this news? IfYes, what should the journal entry be? Also, indicate the immediateeffect of this journal entry on the income statement for2017.
Check one: o Yes, a journal entry is needed; o No journal entry isrequired
If Yes, Journal Entry:
IMMEDIATE impact on the income statement (check one):
o Increase Income oDecrease Income o No impact on Income
Requirement 4: What is the ending balance of theAllowance for doubtful accounts at May 31, 2017? Checkone.
o $862,768 creditbalance o $862,768 debitbalance
o $37,232 debitbalance o $37,232 creditbalance
o $842,768 creditbalance o $842,768 debitbalance
o $57,232 creditbalance o $57,232 debitbalance
Requirement 5: Based on the bankrupt of its customer inMay 2017, the management re-evaluate the collection risk ofTECHNOGYM and conclude the risk is significantly higher than theypreviously thought. Which of the following would be an appropriateaction for the management to take? Check one.
o Keep using the same uncollectiblerates from the past
o Go back to increase the 2016allowance for doubtful accounts to avoid a debit balance of theallowance for doubtful accounts after the write-off of the $900,000account
o Increase the uncollectible rates toincrease the amount of allowance for doubtful accounts the companytakes from 2017 forward
o Be happy about how it takesallowance for doubtful accounts because neither a debit balance ora credit balance of the allowance tells the management anythingabout whether there needs an adjustment to the allowance takingpractice