he following information is extracted from Shelton Corporation’s accounting records at the beginning of 2016: Accounts Receivable $63,000 Allowance for Doubtful Accounts 1,400 (credit) During 2016, sales on credit amounted to $575,000, $557,400 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton’s estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton’s December 31, 2016, balance sheet. 3. Compute Shelton’s receivables turnover. (Round to one decimal place.) 4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
he following information is extracted from Shelton Corporation’s accounting records at the beginning of 2016: Accounts Receivable $63,000 Allowance for Doubtful Accounts 1,400 (credit) During 2016, sales on credit amounted to $575,000, $557,400 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton’s estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton’s December 31, 2016, balance sheet. 3. Compute Shelton’s receivables turnover. (Round to one decimal place.) 4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.1P: Allowance Method for Accounting for Bad Debts At the beginning of 2016, EZ Tech Companys Accounts...
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Question
The following information is extracted from Shelton Corporation’s accounting records at the beginning of 2016:
| Accounts Receivable | $63,000 | |
| Allowance for Doubtful Accounts | 1,400 | (credit) |
During 2016, sales on credit amounted to $575,000, $557,400 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance.
| Required: | |
| 1. | Prepare the |
| 2. | Prepare the Accounts Receivable section of Shelton’s December 31, 2016, |
| 3. | Compute Shelton’s receivables turnover. (Round to one decimal place.) |
| 4. | If Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2? |
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