29 Jun Question Problem 5-24 Determining account balances: percent of reve
Question
Problem 5-24
Determining account balances: percent of revenue allowance method of
accounting for uncollectible accounts
The following information pertains to Leslie’s Floor Store sales on account and accounts
receivable.
Accounts receivable balance, January 1,2012
Allowance for doubtful accounts, January 1,2012
Sales on account, 2012
Cost of goods sold, 2012
Collections of accounts receivable, 2012
$52,500
4,725
925,000
615,000
835,000
After several collection attempts, Leslie’s wrote off $3,100 of accounts that could not be
collected. Leslie’s estimates that bad debts expense will be 0.5 percent of sales on
account.
Required
a. Compute the following amounts.
(1) Using the allowance method, the amount of uncollectible accounts
expense for 2012.
(2) Net realizable value of receivables at the end of 2012.
b. Explain why the uncollectible accounts expense amount is different from the
amount that was written off as uncollectible.
Problem 6-25
Calculating depreciation expense using four different methods
O’Brian Service Company purchased a copier on January 1, 2012, for $17,000 and
paid an additional $200 for delivery charges. The copier was estimated to have a life
of four years or 800,000 copies. Salvage was estimated at $1,200. The copier
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