The amount of cash reported as a current asset may not include:
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San Mateo Company had the following account balances at December 31, 2024, before recording bad debt expense for the year:
| Accounts receivable | $ 1,400,000 |
| Allowance for uncollectible accounts (credit balance) | 22,000 |
| Credit sales for 2024 | 1,950,000 |
San Mateo is considering the following approaches for estimating bad debts for 2024:
- Based on 3% of credit sales
- Based on 6% of year-end accounts receivable
What amount should San Mateo charge to bad debt expense at the end of 2024 under each method?
| Percentage of credit sales | Percentage of accounts receivable | |
| a. | $ 36,500 | $ 62,000 |
| b. | $ 58,500 | $ 62,000 |
| c. | $ 58,500 | $ 84,000 |
| d. | $ 117,000 | $ 95,000 |
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On November 10 of the current year, Flores Mills sold carpet to a customer for $8,900 with credit terms 110/110 , n30/n30 . Flores uses the gross method of accounting for sales discounts.
What is the correct entry for Flores on November 17, assuming the correct payment was received on that date?
Tom’s Textiles shipped the wrong material to a customer, who refused to accept the order. Upon receipt of the material, Tom’s would credit accounts receivable and debit:
Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $491,000 and $1,460 respectively, at December 31, 2023. During 2024, Calistoga’s credit sales and collections were $324,000 and $319,000, respectively, and $1,810 in accounts receivable were written off.
Calistoga’s final balance in its allowance for uncollectible accounts at December 31, 2024, is:
During Burns Company’s first year of operations, credit sales totaled $172,000 and collections on credit sales totaled $121,000. Burns estimates that bad debt losses will be 2.0% of credit sales. By year-end, Burns had written off $460 of specific accounts as uncollectible.
Required:
- Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense.
- Show the year-end balance sheet presentation for accounts receivable.