On December 31, 2017, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2018, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000. What amount would the company report as its net accounts receivable on December 31, 2017? Prepare the journal entry to write off the accounts on January 2, 2018. Assuming no other transactions occurred between December 31, 2017, and January 3, 2018, what amount would the company report as its net accounts receivable on January 3, 2018? Has net accounts receivable changed from December 31, 2017?

Answers

Answer 1
Answer:

Answer and step-by-step explanation:

Step 1: Calculation of net accounts receivable on December 31, 2017

Net accounts receivable

= Accounts Receivable - Allowance for Doubtful Debts

= $800,000 - $55,000

= $745,000

The company shall report its net accounts receivable on December 31, 2017 as $745,000.

Step 2: Journal entry to write off the accounts:

                                                                                    Debit             Credit

2-Jan-2018      Allowance for doubtful debts            $10,000

                               Accounts receivable                                          $10,000

                        Writing off debts not collectible

Step 3: Calculation of net accounts receivable on January 3, 2018:

Net accounts receivable

= Accounts Receivable - Allowance for Doubtful Debts

= $790,000 - $45,000

= $745,000

The company shall report its net accounts receivable on January 3, 2018 as $745,000. The net accounts receivable has not changed from December 31, 2017 because the write-offs worth $10,000 were estimated and allowed for in 2017. Hence, the decrease in accounts receivable is offset by an equal decrease in the allowance for doubtful debts.

Answer 2
Answer:

Final answer:

Extreme Fitness had a Net Accounts Receivable of $745,000 on December 31, 2017. Even after the write-off of certain accounts totalling $10,000 on January 2, 2018, the Net Accounts Receivable strikes the same balance on January 3, 2018, because the write-off affects both the Accounts Receivable and Allowance for Doubtful Accounts equally.

Explanation:

On December 31, 2017, Extreme Fitness had a balance of $800,000 in Accounts Receivable. This amount was offset by a balance of $55,000 in Allowance for Doubtful Accounts, resulting in a Net Accounts Receivable of $745,000 ($800,000 - $55,000).

The company learnt on January 2, 2018, about certain uncollectible accounts and authorized a write-off of $10,000. The journal entry for this would be Debit: Allowance for Doubtful Accounts $10,000 and Credit: Accounts Receivable $10,000. This reduces the Book Value of Accounts Receivable by the write-off amount but does not affect the Net Accounts Receivable.

Thus, post the write-off action on January 3, 2018, the total Accounts Receivable would reduce to $790,000 ($800,000 - $10,000), and the Allowance for Doubtful Accounts would reduce to $45,000 ($55,000 - $10,000). The Net Accounts Receivable, however, still stays at $745,000 ($790,000 - $45,000), just as it was on December 31, 2017.

Learn more about Accounts Receivable here:

brainly.com/question/31928398

#SPJ3


Related Questions

At December 31, 2019, Swifty Corporation reported the following as plant assets.Land $3,980,000Buildings $28,210,000 Less: Accumulated depreciation-buildings 13,200,000 15,010,000Equipment 48,670,000 Less: Accumulated depreciation-equipment 4,980,000 43,690,000Total plant assets $62,680,000During 2020, the following selected cash transaction occurred.April 1 Purchased land for $2,200,000May 1 Sold equipment that cost $840,000 when purchased on January 1, 2016. The equipment was sold for $504,000June 1 Sold land purchased on June 1, 2010 for $1,450,000. The land cost $399,000July 1 Purchased equipment for $2,480,000Dec. 31 Retired equipment that cost $491,000 when purchased on December 31,2010. The company received no proceeds related to salvage.-Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement.-Record adjusting entries for depreciation for 2020. Credit account titles are automatically indented when the amount presented in the problem. If no entry is required, select "No Entry for the account titles and enter 0.
During 2017, Carl (a single taxpayer) has a salary of $91,500 and interest income of $11,000. Calculate the maximum contribution Carl is allowed for an educational savings account. a. $0 b. $400 c. $1,000 d. $2,000 e. Some other amount
Highlight the possible risks and problems that should be address during the implementation process?
Next Generation's predetermined overhead rate is $16 per direct labor-hour and its direct labor wage rate is $11 per hour. Job #1987 used $1,202 of direct materials and $5,500 of direct labor. Question: If Job #1987 consists of 100 units, what is the average cost assigned to each unit included in the job?
The skill you’re focusing on this week is:

Which of these is NOT one of the documents that a project manager can refer back to in order to make sure that all planned work has, in fact, been completed

Answers

Answer: d. Resource Breakdown Structure (RBS)

Explanation:

The options are:

a. Work Breakdown Structure (WBS)

b. Project Charter

c. Project Scope Statement

d. Resource Breakdown Structure (RBS)

The documents that a project manager can refer back to in order to make sure that all planned work has, in fact, been completed are the project charter, project scope statement, work breakdown structure. They can all be used to ensure that whatever was meant to be done have all been completed and that nothing is left out.

The project charter simply contains the objectives of the projects and how the project will be done. The project scope statement contains the deliverable of the project,and everyone that the project will impact upon.

The work breakdown structure is used to divide the work into smaller parts for efficiency and effectiveness sake.

It should be noted that the resource Breakdown Structure (RBS) is not part of the documents that the project manager should refer back on.

Final answer:

In project management, there are several documents used to check if all planned tasks have been performed such as the Project Charter, Project Plan, and Work Breakdown Structure (WBS). However, the Employee Handbook is not typically one of these, as it is more associated with HR policies.

Explanation:

In the framework of project management, a number of documents are available for a project manager to reflect on and validate that all anticipated tasks have indeed been carried out. These documents comprise of theProject Charter, Project Plan, and the Work Breakdown Structure (WBS). However, the Employee Handbook is not typically considered one of these documents. This handbook is more associated with HR procedures and policies, unlike the others which are tailored explicitly to project management and ensure that all planned tasks have been implemented as required.

Learn more about project management here:

brainly.com/question/37675308

#SPJ3

The Accounts Receivable balance for Bach Consulting is $4,400,000 as of May 31, 2020. Before calculating and recording the month’s bad debt expense, there is a credit balance in the Allowance for Doubtful Accounts of $80,000. The May 2020 net sales were $30,000,000. In the past several years, 1% of net sales have proven uncollectible. An aging of accounts receivable results in a $360,000 estimate for the Allowance for Doubtful Accounts as of May 31, 2020.PART A: PERCENT OF SALES METHOD

Assume that Bach Consulting uses the percent of sales method to estimate future uncollectible accounts.

What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $___________
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $___________
PART B: ANALYSIS OF RECEIVABLES METHOD

Assume that Bach Consulting instead uses the analysis of receivables method to estimate future uncollectible accounts.

What adjusting entry does Bach make to record May 2020 Bad Debt Expense?
What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $___________
What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $___________
Problem 3

Use PVH Corp.’s financial statement information to answer the following questions.

Provide the following account balances for PVH:
February 2, 2020

February 3, 2019

Accounts Receivable (gross)

Allowance for Doubtful Accounts

Accounts Receivable, net

Which of the above numbers represents the amount of its February 2, 2020 Accounts Receivable balance that PVH expects to collect in the subsequent year(s)?
Which of the above numbers represents that amount that PVH believes it will not collect from its customers as of February 2, 2020?
Which of the above numbers represents the total amount PVH is owed by customers as of February 2, 2020?
Provide the journal entry (both accounts and amounts) that PVH must have made to record its estimate of Bad Debt Expense in fiscal year 2019.
Provide the journal entry (both accounts and amounts) that PVH must have made to record Accounts Receivable writeoffs in fiscal year 2019.

Answers

Answer:

Assume that Bach Consulting uses the percent of sales method to estimate future uncollectible accounts.

What adjusting entry does Bach make to record May 2020 Bad Debt Expense?

Dr Bad debt expense 300,000 (= $30,000,000 x 1%)

    Cr Allowance for doubtful accounts 300,000

What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $4,100,000 (=  $4,400,000 - $300,000)

What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $300,000

Assume that Bach Consulting instead uses the analysis of receivables method to estimate future uncollectible accounts.

What adjusting entry does Bach make to record May 2020 Bad Debt Expense?

Dr Bad debt expense 280,000 (= $360,000 - $80,000)

    Cr Allowance for doubtful accounts 280,000

What is "Accounts Receivable, net" on Bach’s May 31, 2018 Balance Sheet? $4,120,000

What is "Bad Debt Expense" on Bach’s May 2020 Income Statement? $280,000

Use PVH Corp.’s financial statement information to answer the following questions.

Provide the following account balances for PVH:

                                                  February 2, 2020      February 3, 2019

Accounts Receivable (gross)        $762,000,000      $800,000,000

Allowance for Doubtful Accounts   $21,000,000         $22,000,000

Accounts Receivable, net             $741,000,000       $778,000,000

Which of the above numbers represents the amount of its February 2, 2020 Accounts Receivable balance that PVH expects to collect in the subsequent year(s)?

$741,000,000

Which of the above numbers represents that amount that PVH believes it will not collect from its customers as of February 2, 2020?

$21,000,000

Which of the above numbers represents the total amount PVH is owed by customers as of February 2, 2020?

$762,000,000

Provide the journal entry (both accounts and amounts) that PVH must have made to record its estimate of Bad Debt Expense in fiscal year 2019.

Dr Bad debt expense 22,000,000

    Cr Allowance for doubtful accounts 22,000,000

Provide the journal entry (both accounts and amounts) that PVH must have made to record Accounts Receivable writeoffs in fiscal year 2019.

Dr Allowance for doubtful accounts 22,000,000

    Cr Accounts receivable 22,000,000

Explanation:

Accounts receivable = $4,400,000

beginning balance Allowance for doubtful accounts = $80,000

May's net sales = $30,000,000

1% of net sales are uncollectible

aging of accounts receivable results in a $360,000 estimate for the Allowance for doubtful accounts as of May 31, 2020

The benefits and detriments of using electronic records EHR for your patience

Answers

EHR's provide quick and easy access to patients records. It also reduces the need for paper charts and filling space. The chances of losing a single document gets reduced as well since files are saved on a server. Information is stored more neatly and easily identifiable.However, if the server crashes or gets hacked the patient information is either lost or completely compromised. Servers go down and have bugs which can delay access to information that is immediately needed. Servers also need constant maintenance.

Oakland Corporation reported a net operating loss of $500,000 in 20X3 and elected to carry the loss forward to 20X4. Not included in the computation was a disallowed meals and entertainment expense of $20,000, tax-exempt income of $10,000, and deferred gain on an installment sale of $250,000. The corporation's current earnings and profits for 20X3 would be:A. ($500,000)B. ($720,000)C. ($510,000)D. ($260,000)

Answers

Answer:

The correct answer is

D. ($260,000)

good luck ❤

Carla incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following values and adjusted bases:FMV Adjusted basis
Inventory $35,750 $10,100
Building 153,000 106,500
Land 291,750 375,000
Total $480,500 $491,600
The corporation also assumed a mortage of $153,750 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $320,750.
Required:
a. What amount of gain or loss does Carla realize on the transfer of the property to the corporation?
b. What amount of gain or loss does Carla recognize on the transfer of the property to the corporation?
c. What is Carla's basis in the stock she receives in her corporation?

Answers

Answer:

a. The amount of loss does Carla realize on the transfer of the property to the corporation is -$17,100

b. Carla does not recognized any gain or loss on the transfer of the property to the corporation

c. The amount of Carla's basis in the stock she receives in her corporation is $337,850

Explanation:

a. In order to calculate the amount of gain or loss does Carla realize on the transfer of the property to the corporation we would have to use the following formula:

amount of gain or loss=Fair market value of stock received+morgage assume by corporation-Adjusted tax basis of the property transferred

amount of gain or loss=$320,750+$153,750-$491,600

amount of gain or loss=-$17,100

The amount of loss does Carla realize on the transfer of the property to the corporation is -$17,100

b. Carla does not recognized any gain or loss on the transfer of the property to the corporation because the requirements are met and no boot is received in exchange.

c. In order to calculate the amount of Carla's basis in the stock she receives in her corporation we would have to use the following formula:

amount of Carla's basis in the stock=Adjusted tax basis of the property transferred-morgage assume by corporation

amount of Carla's basis in the stock=$491,600-$153,750

amount of Carla's basis in the stock=$337,850

The amount of Carla's basis in the stock she receives in her corporation is $337,850

Use the following information: Beginning cash balance on March 1, $76,000. Cash receipts from sales, $304,000. Budgeted cash payments for direct materials,$137,000. Budgeted cash payments for direct labor $77,000. Other budgeted cash expenses, $43,000. Cash repayment of bank loan, $10,000. Prepare a cash budget for the month ended on March 31 for Gado Company. The budget should show expected cash receipts and cash disbursements for the month of March and the balance expected on March 31.

Answers

Answer:

Ending Cash balance 113,000

Explanation:

Beginnin                           76,000

Cash receipts                304,000

payment of DM             (137,000)

payment of DL               (77,000)

other cash expenses    (43,000)

loan repayment             (10,000)

Ending Cash balance 113,000

Other Questions
A man works for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: splishy splashies, frizzles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, a man knows that complements are typically consumed together while substitutes can take the place of other goods.Run-of-the-Mills provides man's marketing firm with the following data: When the price of splishy splashies decreases by 5%, the quantity of frizzles sold increases by 4% and the quantity of kipples sold decreases by 6%. A man's job is to use the cross-price elasticity between splishy splashies and the other goods to determine which goods to a man marketing firm should advertise together.Complete the first column of the following table by computing the cross-price elasticity between splishy splashies and frizzles, and then between splishy splashies and kipples. In the second column, determine if splishy splashies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating should be recommended marketing with splishy splashies.Relative to Splishy Splashies Recommend Marketing with Splishy SplashiesCross-Price Elasticity of Demand Complement or SubstituteFrizzles _____ _____ _____Kipples _____ _____ _____