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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