Robin and Jeff Own an Unincorporated Hardware Store

question 39

Essay

Robin and Jeff own an unincorporated hardware store.They determine their salaries at the end of the year by using the amount required to reduce the net income of the hardware store to $0.Based on this policy, Robin and Jeff each receive a total salary of $125,000.This is paid as follows: $8,000 per month and $29,000 on December 31.
Determine the amount of the salary deduction.

---

Definitions:

Allowance for Doubtful Accounts

Allowance for doubtful accounts is an accounting provision that estimates the amount of receivables that may not be collectible due to customer defaults.

Credit Sales

Sales made on credit, allowing the buyer to pay the seller at a later date.

Sales Discounts

Reductions in the selling price offered to customers, often as an incentive for early payment or bulk purchases.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the amount of accounts receivable that may not be collectible.