The Following Information Is Available for Parsons Corporation,which Uses the Allowance

question 110

Essay

The following information is available for Parsons Corporation,which uses the allowance method of accounting for uncollectible accounts. Parsons expects 1% of sales on account to be uncollectible.
Required:
a)What is the balance of Accounts Receivable at the end of 2012?
b)What is the amount of uncollectible accounts expense for 2012? Use the financial statements model below to indicate the effect of recording uncollectible accounts expense.Include dollar amounts of increases and decreases.
c)In 2013,after several attempts of collection,Parsons wrote off accounts that could not be collected in the amount of $300.Use the financial statements model that is provided to indicate the effect of the write-off on the financial statements,indicating amounts of increases and decreases.
d)Later in 2013,Erin received a check for $50 from one of the customers whose account had been written off in c)above.Use the financial statements model to indicate the effect of the collection of the $50 on the financial statements,indicating amounts of increases and decreases.

Understand how budgeted financial statements are integrated from various budget components.

Recognize the categories of expenses in different budgets.

Understand the role of cash and capital expenditures budgets in financial planning.

Understand and describe the budgeting process and its components.

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Definitions:

Indigenous Production

The process of manufacturing goods within a particular region or territory using local resources and labor.

Service Economy

An economic phase in which the service sector generates more wealth than the manufacturing sector of the economy, characterized by a high volume of services relative to goods.