rarbor
Jun 24, 2013, 06:09 PM
Accounting for uncollectible accounts: percent of receivables
Allowance method
Hammond Inc. experienced the following transactions for 2012, its first year of operations:
1. Issued common stock for $80,000 cash.
2. Purchased $225,000 of merchandise on account.
3. Sold merchandise that cost $148,000 for $294,000 on account.
4. Collected $242,000 cash from accounts receivable.
5. Paid $210,000 on accounts payable.
6. Paid $46,000 of salaries expense for the year.
Edmonds, Thomas (2011-01-28). Survey of Accounting (Page 192). Business And Economics. Kindle Edition.
Allowance method
Hammond Inc. experienced the following transactions for 2012, its first year of operations:
1. Issued common stock for $80,000 cash.
2. Purchased $225,000 of merchandise on account.
3. Sold merchandise that cost $148,000 for $294,000 on account.
4. Collected $242,000 cash from accounts receivable.
5. Paid $210,000 on accounts payable.
6. Paid $46,000 of salaries expense for the year.
Edmonds, Thomas (2011-01-28). Survey of Accounting (Page 192). Business And Economics. Kindle Edition.