(answered) – 1) Compute the required balance of the Allowance forDescriptionSolution downloadThe Question1) Compute the required balance of the Allowance for Uncollectible Accounts for the following receivables: Accounts Age Probability Receivable (months) of Collection $180,000 Less than 1 95% 90,000 1-3 85 39,000 3-6 75 12,000 6-9 35 2,250 9-12 10 2) On 2009 April 1, Kelley Company, which uses the allowance method of accounting for uncollectible accounts, wrote off Bob Dyer’s USD 400 account. On 2009 December 14, the company received a check in that amount from Dyer marked “in full payment of account”. Prepare the necessary entries. 3) Jamestown Furniture Mart, Inc., sold USD 80,000 of furniture in May to customers who used their American Express credit cards. Such sales are subject to a 3 per cent discount by American Express (a nonbank credit card), a. Prepare journal entries to record the sales and the subsequent receipt of cash from the credit card company. b. Do the same as requirement (a), but assume the credit cards used were VISA cards (a bank credit card). 4. Dunwoody Discount Toys, Inc., sells merchandise in a state that has a 5 per cent sales tax. Rather than record sales taxes collected in a separate account, the company records both the sales revenue and the sales taxes in the Sales account. At the end of the first quarter of operations, when it is time to remit the sales taxes to the state taxing agency, the company has USD 420,000 in the Sales account. Determine the correct amount of sales revenue and the amount of sales tax payable.
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