The Following Information Was Taken from the Records of Alphabet

question 54

Essay

The following information was taken from the records of Alphabet Soup at the end of 2012:
$\begin{array}{ll}\text { Cash sales } & \$ 1,000,000 \\\text { Credit saless } & 500,000 \\\text { Sales ciscounts } & 5,000 \\\text { Accounts Receivable } & 250,000 \\\text { Allowance for Doubtful Accounts (before adjustment) } & (25,000) \\\text { Estimated uncollected accounts } & 2,475 \\\text { Cost of goods sold } & \$ 975,000\end{array}$ Determine the following:
A)Gross sales
B)Net sales
C)Gross profit
Assuming the company uses the income statement approach to estimating uncollectibles:
D)Bad debt estimate percentage
E)Year-end adjusting entry to record bad debt expense
F)Ending balance in Allowance for Doubtful Accounts after adjustment
G)Net realizable value of receivables after adjustment for bad debts
Assuming the company uses the balance sheet approach to estimating uncollectibles:
H)Gross receivables
I)Ending balance in Allowance for Doubtful Accounts after adjustment
J)Net realizable value of receivables after adjustment for bad debts

• A)Gross sales
• B)Net sales
• C)Gross profit
• Assuming the company uses the income statement approach to estimating uncollectibles:
• D)Bad debt estimate percentage
• E)Year-end adjusting entry to record bad debt expense
• F)Ending balance in Allowance for Doubtful Accounts after adjustment
• G)Net realizable value of receivables after adjustment for bad debts
• Assuming the company uses the balance sheet approach to estimating uncollectibles:
• H)Gross receivables
• I)Ending balance in Allowance for Doubtful Accounts after adjustment
• J)Net realizable value of receivables after adjustment for bad debts

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Definitions:

Low-Context Culture

A culture in which communication is explicit, messages are direct, and understanding is based more on verbal interaction than on contextual cues.

Multimodal Style

An approach to communication that combines multiple modes or methods such as text, images, audio, and video to convey a message more effectively.

Brusque

Describing a manner of speaking or writing that is abrupt and curt, often perceived as blunt or rude.

Polychronic Cultures

Societies that prioritize relationships over schedule adherence, often multitasking and valuing personal interactions.