The December 31 2015 Balance Sheet of Barone Company Had

question 106

Essay

The December 31 2015 balance sheet of Barone Company had Accounts Receivable of $400000 and a credit balance in Allowance for Doubtful Accounts of $32000. During 2016 the following transactions occurred: sales on account $1500000; sales returns and allowances $50000; collections from customers $1250000; accounts written off $36000; previously written off accounts of $6000 were collected.
Instructions
(a) Journalize the 2016 transactions.
(b) If the company uses the percentage-of-sales basis to estimate bad debt expense and anticipates 3% of net sales to be uncollectible what is the adjusting entry at December 31 2016?
(c) If the company uses the percentage of receivables basis to estimate bad debt expense and determines that uncollectible accounts are expected to be 8% of accounts receivable what is the adjusting entry at December 31 2016?
(d) Which basis would produce a higher net income for 2016 and by how much?

Analyze the effects of inventory valuation method changes on interim financial reporting.

Understand and apply principles of taxation allocation within financial periods.

Identify and explain differences and similarities between IFRS and U.S. GAAP in segment reporting.

Execute segment reporting tests, including the asset test, and determine reportable segments.

---

Definitions:

Listening

The active process of receiving, interpreting, and responding to verbal and non-verbal messages.

Personal Distance

The physical space preferred by an individual in social interactions, which can vary significantly between different cultures and personal preferences.

Develop Rapport

The process of building a harmonious and understanding relationship between individuals.

Secrecy

The act or practice of keeping information hidden or confidential, not to be shared or disclosed with unauthorized individuals.