Mohr Manufacturing, Inc Mohr Also Had the Following Beginning and Ending Balances in

question 65

Essay

Mohr Manufacturing, Inc. had the following sales during 2014: $$\begin{array} { l l } \text { Cash sales } & \$ 120,000 \\\text { Credit sales } & \$ 600,000 \\\text { Credit card sales } & \$ 2,000,000\end{array}$$
Mohr also had the following beginning and ending balances in the receivables accounts: $$\begin{array} { l c l } & \text { Beginning } & \text { Ending } \\\text { Credit sales } & \$ 120,000 & \$ 90,000 \\\text { Credit card sales } & \$ 400,000 & \$ 420,000\end{array}$$
Mohr, which uses the allowance method of accounting for uncollectible accounts, estimated that 3% of the credit sales will go uncollected. The credit card company charges Mohr a 4% service charge.
a) What was the amount of uncollectible accounts expense related to credit sales?
b) What was the amount of the company's expense for credit card fees during the year?
c) What was Mohr's cash flow from customers for the year?

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Definitions:

Morale Problem

A situation in an organization where employee confidence, enthusiasm, and discipline are significantly diminished.

Fringe Benefits

Additional compensations provided to employees on top of their regular salary, such as health insurance, retirement plans, and paid time off.

Older Employees

Individuals in the workforce who are typically considered to be near or beyond the traditional age of retirement, offering valuable experience and stability.

Monthly Wages

Regular payments made to employees based on a monthly rate for their work services.