The Garvey Sign Company Uses the Allowance Method in Accounting

question 17

Essay

The Garvey Sign Company uses the allowance method in accounting for uncollectible accounts. Past experience indicates that 6% of accounts receivable will eventually be uncollectible. Selected account balances at December 31, 2013, and December 31, 2014, appear below: Instructions
(a) Record the following events in 2014.
Aug. 10 Determined that the account of Kurt West for $900 is uncollectible.
Sept. 12 Determined that the account of Jill Lynch for $3,000 is uncollectible.
Oct. 10 Received a check for $300 as payment on account from Kurt West, whose account had previously been written off as uncollectible.
(b) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2014.
(c) What is the balance of Allowance for Doubtful Accounts at December 31, 2014?

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Definitions:

P-Value

The probability of obtaining test results at least as extreme as the results actually observed, assuming that the null hypothesis is correct.

Sign Test

A non-parametric test used to determine if there is a significant difference between paired observations.

Tied Pairs

Occurs when pairs of subjects have identical values for either the treatment or the control variable in matched-pairs experiments.

Signs Of Differences

This phrase could indicate an analysis in data to find deviations or variability, but as a standalone term, its specificity in statistics or data science is unclear, possibly meaning NO.