Gary, Inc. had the following sales during 2013: Gary also had the following beginning and ending balances in the receivables accounts: Gary, who uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Gary a 4% service charge.
Required:
a) Prepare Gary's year-end adjusting journal entry for uncollectible accounts expense.
b) Prepare the entry to record the credit card sales.
c) What is Gary's cash flow from customers for the year?

Question

Gary, Inc. had the following sales during 2013:  Gary also had the following beginning and ending balances in the receivables accounts:  Gary, who uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Gary a 4% service charge.
Required:
a) Prepare Gary's year-end adjusting journal entry for uncollectible accounts expense.
b) Prepare the entry to record the credit card sales.
c) What is Gary's cash flow from customers for the year?

Quizplus · Accepted Answer

The Answer of Gary, Inc. had the following sales during 2013:  Gary also had the following beginning and ending balances in the receivables accounts:  Gary, who uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Gary a 4% service charge.
Required:
a) Prepare Gary's year-end adjusting journal entry for uncollectible accounts expense.
b) Prepare the entry to record the credit card sales.
c) What is Gary's cash flow from customers for the year?

Gary, Inc Had the Following Sales During 2013: Gary Also