Joey’s Bike Shop sells new and used bicycle parts. Although a majority of its sales are cash sales, it makes a significant amount of credit sales. During 2018, its first year of operations, Joey’s Bike Shop experienced the following:
Sales on account………………………………………………………………………..$260,000
Cash sales……………………………………………………………………………………580,000
Collections of accounts receivable………………………………………………..235,000
Uncollectible accounts charged off during the year………………………….1,250
Required
Assume that Joey’s Bike Shop uses the allowance method of accounting for uncollectible accounts and estimates that 1 percent of its sales on account will not be collected. Answer the following questions:
a. What is the balance at December 31, 2018?
b. What is the ending balance of Allowance for Doubtful Accounts at December 31, 2018, after all entries and adjusting entries are posted?
c. What is the amount of uncollectible accounts expense for 2018?
d. What is the net realizable value of at December 31, 2018?
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com