1. Easy Motor Company makes sales on which an 8% sales tax is assessed. The following summary transactions were made during 2020: a. Cash sales of $900,000, excluding sales taxes b. Credit sales of $2,150,000, including sales taxes c. Sales taxes of $250,000 were paid to the state Required: Prepare journal entries to record the preceding transactions. (Round to the nearest whole number.)

1. Easy Motor Company makes sales on which an 8% sales tax is assessed. The following summary transactions were made during 2020: a. Cash sales of $900,000, excluding sales taxes b. Credit sales of $2,150,000, including sales taxes c. Sales taxes of $250,000 were paid to the state Required: Prepare journal entries to record the preceding transactions. (Round to the nearest whole number.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...

See similar textbooks

Similar questions

In 2020, Sahara Company has net credit sales of $923,795 for the year. It had a beginning accounts receivable (net) balance of $38,275 and an ending accounts receivable (net) balance of $35,988. Instruction: Compute Sahara Company’s (a) Accounts receivable turnover. (b) Average collection period in days.
A company is getting ready to publish their annual financial statements. They have the following beginning balances: Beginning balance for gross accounts receivable (A) $2,000 beginning balance for Allowance for doubtful accounts (XA) $300 question: now supposed that the company recorded $50 in write-offs for the current accounting period. if the company makes $10,000 in credit sales in the current period. Assume that 1% of credit sales are typically not collectible, using the income statement method, what is the bad expense now? please show work so I can understand the problem
At January 1, 2024, Tarjee Inc. reported the following information on its statement of financial position: Accounts receivable $530,000 40,000 Allowance for expected credit losses ,40,000 During 2024, the company had the following summary transactions for receivables: Sales on account, $1,930,000; cost of goods sold, $1,061,500; return rate, 5% Selling price of goods returned, $76,000; cost of goods returned to inventory, $41,800 Collections of accounts receivable, $1,700,000 Write-offs of accounts receivable deemed uncollectible, $53,000 Collection of accounts previously written off as uncollectible, $12,000 After considering all of the above transactions, total estimated uncollectible accounts, $32,000 Prepare the journal entries to record each of the above summary transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account…
Lotus fabrics wants to forecast its accounts receivable for the year 2021 with the following annual information. Also state two advantages of forecasting of accounts receivables for the entity. Receivable days assumption = 60 days Payable days assumption = 72 days Forecasted revenue = 325,000 Forecasted cost of goods sold = 180,250 Choices: 51,195 53,425 49,800 41,705
Ill Company provides the following data for the year 2020: Cash sales - 500,000; Collection from customers -3,950,000; Increase in accounts receivable - 250,000; Decrease in notes receivable - 50,000; accounts receivable written off - 100,000; sales discounts - 200,000; and sales return and allowances - 70,000 (20,000 of which refunded to customers) What was the amount of gross sales for 2020? P5,020,000 P4,900,000 P4,500,000 d. P5,000,000
In 2020, HK company has net credit sales of 925,000$ for the year. It had a beginning account receivable (net) balance of 38,000$ and an ending account receivable (net) balance of 36,000$, account receivable turnover (average collection period) in days is O a. 14.4 b. 16.4 O C. 12 O d. 13
Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method: Determine the amount to be charged to the uncollectible expense account. Prepare the Allowance for uncollectible account. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31.
During December, Far West Services makes a $5,000 credit sale. The state sales tax rate is 6% and the local sales tax rate is 2.5%. (Note: the sales tax amount is in addition to the credit sale amount.) Record sales and sales tax payable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 > Record the sale including the sales tax. Note: Enter debits before credits. Transaction General Journal Debit Credit 1
Required information [The following information applies to the questions displayed below) The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: 1. Received $41,000 cash from the issue of a short-term note with a 4 percent interest rate and a one-year maturity. The note was made on April 1, Year 1. 2. Received $121,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 5 percent 3. Paid $72.500 cash for other operating expenses during the year. 4. Paid the sales tax due on $101,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until Year 2. 5. Recognized the accrued interest at December 31, Year 1 The following transactions apply to Walnut Enterprises for Year 2: 1. Paid the balance of the sales tax due for Year 1. 2. Received $146,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 5 percent.…
ook int ences During 2020, Jesse Jericho Enterprises Corporation recorded credit sales of $786,000. At the beginning of the year, Accounts Receivable, Net of Allowance was $93,500. At the end of the year, after the Bad Debt Expense adjustment was recorded but before any bad debts had been written off, Accounts Receivable, Net of Allowance was $70,000. Required: 1. Assume that on December 31, 2020, accounts receivable totalling $10,000 for the year were determined to be uncollectible and written off. What was the receivables turnover ratio for 2020? (Round your answer to 1 decimal place.) Receivables turnover ratio 2. Assume instead that on December 31, 2020, $11,000 of accounts receivable was determined to be uncollectible and written off. What was the receivables turnover ratio for 2020? (Round your answer to 1 decimal place.) Receivables turnover ratio
Required: Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 Journal Entries Date Particulars Debit($) Credit($) 10.1.20 Accounts Receivable 11000 To sales 11000 15.5.20 Allowance for uncollectible accounts(2500+400) 2900 To accounts receivable 2900 4.8.20 Cash(70% of 11000) 7700 Allowance for uncollectible accounts(30% of $11000) 3300 To Accounts Receivable 1100 26.10.20 Accounts Receivable(30% of $400) 120 To allowance for uncollectible accounts 120 26.10.20 Cash 120 To accounts receivable 120…
A company has the following account balances at the end of the year:• Credit Sales = $400,000• Accounts receivable = $80,000• Allowance for Uncollectible Accounts = $400 credit The company estimates 1% of credit sales will be uncollectible. At what amount would Allowance for Uncollectible Accounts be reported in the current year’s balance sheet? a. $4,000.b. $4,400. c. $3,600. d. $800.