Mohr Manufacturing, Inc. had the following sales during 2014: $$\begin{array} { l l }
\text { Cash sales } & \$ 120,000 \
\text { Credit sales } & \$ 600,000 \
\text { Credit card sales } & \$ 2,000,000
\end{array}$$
Mohr also had the following beginning and ending balances in the receivables accounts: $$\begin{array} { l c l }
& \text { Beginning } & \text { Ending } \
\text { Credit sales } & \$ 120,000 & \$ 90,000 \
\text { Credit card sales } & \$ 400,000 & \$ 420,000
\end{array}$$
Mohr, which uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Mohr a 4% service charge.
a) What was the amount of uncollectible accounts expense related to credit sales?
b) What was the amount of the company's expense for credit card fees during the year?
c) What was Mohr's cash flow from customers for the year?

Question

Mohr Manufacturing, Inc. had the following sales during 2014: $$\begin{array} { l l } 
\text { Cash sales } & \$ 120,000 \
\text { Credit sales } & \$ 600,000 \
\text { Credit card sales } & \$ 2,000,000
\end{array}$$ 
Mohr also had the following beginning and ending balances in the receivables accounts: $$\begin{array} { l c l } 
& \text { Beginning } & \text { Ending } \
\text { Credit sales } & \$ 120,000 & \$ 90,000 \
\text { Credit card sales } & \$ 400,000 & \$ 420,000
\end{array}$$ 
Mohr, which uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Mohr a 4% service charge.
a) What was the amount of uncollectible accounts expense related to credit sales?
b) What was the amount of the company's expense for credit card fees during the year?
c) What was Mohr's cash flow from customers for the year?

Quizplus · Accepted Answer

The Answer of Mohr Manufacturing, Inc. had the following sales during 2014: $$\begin{array} { l l } 
\text { Cash sales } & \$ 120,000 \
\text { Credit sales } & \$ 600,000 \
\text { Credit card sales } & \$ 2,000,000
\end{array}$$ 
Mohr also had the following beginning and ending balances in the receivables accounts: $$\begin{array} { l c l } 
& \text { Beginning } & \text { Ending } \
\text { Credit sales } & \$ 120,000 & \$ 90,000 \
\text { Credit card sales } & \$ 400,000 & \$ 420,000
\end{array}$$ 
Mohr, which uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Mohr a 4% service charge.
a) What was the amount of uncollectible accounts expense related to credit sales?
b) What was the amount of the company's expense for credit card fees during the year?
c) What was Mohr's cash flow from customers for the year?

Mohr Manufacturing, Inc Mohr Also Had the Following Beginning and Ending Balances in