This Company Sells Merchandise Only on Credit -Refer to Aardvark Resale

question 69

Essay

This company sells merchandise only on credit. For the year ended December 31, Year 1, the following data are available:
$\begin{array}{lr}\text { Sales } & \$ 1,200,000 \\\text { Sales returns and allowances } & 50,000 \\\text { Accounts receivable — January 1, Year 1 } & 225,000 \\\text { Allowance for doubtful accounts —January 1, Year 1 } & 15,000 \\\text { Collections during Year 1 } & 1,050,000 \\\text { Accounts written off as uncollected during Year 1 } & 10,000\end{array}$
-Refer to Aardvark Resale.Assume that the company estimates bad debts at 2% of net credit sales.
A) What amount will the company record as bad debts expense for Year 1?

B) How much is the net realizable value of accounts receivable reported an the compary's balance sheet at December 31 Year 1 ?

Explore the dynamics between personality traits and situational behavior.

Understand the concept and types of job crafting and how they influence work outcomes.

Recognize the significance of the Job Characteristics Model and its impact on work behavior and attitudes.

Distinguish between increasing structural and social job resources and their effects on job satisfaction and performance.

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Definitions:

Beginning Inventory

The price of items on offer for purchase at the onset of an accounting cycle.

Markup

An addition to the purchase cost of items intended to cover both operational costs and generate a profit.

Net Sales

The revenue from sales transactions after subtracting returns, allowances for damaged or missing goods, and discounts.

Average Inventory

Calculated by adding the value of the inventory at the beginning and end of a period and dividing by two, reflecting an average amount of inventory held over the period.