Soorya Inc. had the following balances for fiscal 2012.
Additional information on 2012 transactions:
Here is an aging of the accounts receivable:
Required:
a)How much cash was collected from accounts receivable during 2012?
b)Prepare the journal entry to record the discounts using both the gross and net method of accounting; assume that the total discounts given related to sales totaling $450,000. Also prepare the journal entry that would be required if the discounts were not taken by customers under the net method.
c)Assume all discounts were taken by customers and that the company used the gross method.
Complete the following chart:
d)What would the bad debt expense be if Soorya wanted to use the percentage of sales method and felt that its experience showed that 4.5% of sales were not collectible?

Question

Soorya Inc. had the following balances for fiscal 2012.
  Additional information on 2012 transactions:
  Here is an aging of the accounts receivable:
  Required:
a)How much cash was collected from accounts receivable during 2012?
b)Prepare the journal entry to record the discounts using both the gross and net method of accounting; assume that the total discounts given related to sales totaling $450,000. Also prepare the journal entry that would be required if the discounts were not taken by customers under the net method.
c)Assume all discounts were taken by customers and that the company used the gross method.
Complete the following chart:
  d)What would the bad debt expense be if Soorya wanted to use the percentage of sales method and felt that its experience showed that 4.5% of sales were not collectible?

Quizplus · Accepted Answer

The Answer of Soorya Inc. had the following balances for fiscal 2012.
  Additional information on 2012 transactions:
  Here is an aging of the accounts receivable:
  Required:
a)How much cash was collected from accounts receivable during 2012?
b)Prepare the journal entry to record the discounts using both the gross and net method of accounting; assume that the total discounts given related to sales totaling $450,000. Also prepare the journal entry that would be required if the discounts were not taken by customers under the net method.
c)Assume all discounts were taken by customers and that the company used the gross method.
Complete the following chart:
  d)What would the bad debt expense be if Soorya wanted to use the percentage of sales method and felt that its experience showed that 4.5% of sales were not collectible?