At the end of 2022, Shah Corp. underestimated its annual bad debts expense by $50,000. What is the effect of this error, if any, on total assets and total stockholders’ equity on 12/31/22? Total assets and total stockholders’ equity are both overstated by $50,000. Total assets and total stockholders’ equity are both understated by $50,000. Total assets and total stockholders’ equity are both correctly stated
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At the end of 2022, Shah Corp. underestimated its annual
- Total assets and total stockholders’ equity are both overstated by $50,000.
- Total assets and total stockholders’ equity are both understated by $50,000.
- Total assets and total stockholders’ equity are both correctly stated.
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- Geisel, Inc. reported net sales revenue of $522,000 in 2018 and $628,000 in 2019. The company’s ending net receivables were $112,000 during 2017 and $131,000 during 2018. At December 31, 2019, the company had Accounts Receivable of $144,000 and an unadjusted debit balance in its Allowance for Doubtful Accounts account of $1,800. The company reported Bad Debt Expense of $9,990 during 2019. Required: Determine the net receivables at December 31, 2019. Calculate the receivables turnover ratio for 2018 and 2019. Calculate the days to collect for 2018 and 2019.Aerospace Electronics reports $568,000 in credit sales for 2018 and $634,500 in 2019. They have a $501,000 accounts receivable balance at the end of 2018, and $602,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 5% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 7% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. How does the new total bad debt expense affect net income and net accounts receivable? Bad debt expense is lower, net income is higher, and net receivables are higher. b. Bad debt expense is lower, net income is higher, and net receivables are lower. C. Bad debt expense is higher, net income is lower, and net receivables are higher. d. Bad debt expense is higher, net income is lower, and net receivables are lower.Circle Inc. had bad debt expense on its customer receivables as follows for 2016-2019, respectfully. Compute the trend percentages (whole number % changes, only) for these years assuming 2016 is the base year. 2016 $80,000 2017 $88,000 2018 $95,000 2019 $102,000
- A company failed to record unrealized gains of $38 million on its debt investments classified as trading securities. Its tax rate is 25%. As a result of this error, total shareholders' equity would be:Aerospace Electronics reports $570,000 in credit sales for 2018 and $634,500 in 2019. They have a $501,000 accounts receivable balance at the end of 2018, and $602,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 4% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 6% during 2019. A. Determine the bad debt estimation for 2018. $ B. Determine the bad debt estimation for 2019. C. How does the new total bad debt expense affect net income and net accounts receivable? Bad debt expense is lower, net income is higher, and net re а. are higher. Bad debt expense is lower, net income is higher, and net re b. are lower. Bad debt expense is higher, net income is lower, and net re С. are higher. Bad debt expense is higher, net income is lower, and net re d. are lower.Aerospace Electronics reports $570,000 in credit sales for 2018 and $635,500 in 2019. They have a $503,000 accounts receivable balance at the end of 2018, and $605,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 6% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 8% during 2019. A. Determine the bad debt estimation for 2018. $fill in the blank 1 B. Determine the bad debt estimation for 2019. $fill in the blank 2 C. How does the new total bad debt expense affect net income and net accounts receivable? a. Bad debt expense is lower, net income is higher, and net receivables are higher. b. Bad debt expense is lower, net income is higher, and net receivables are lower. c. Bad debt expense is higher, net income is lower, and net receivables are higher. d. Bad debt expense is higher, net income is lower, and net receivables are lower.
- Aerospace Electronics reports $570,000 in credit sales for 2018 and $635,500 in 2019. They have a $503,000 accounts receivable balance at the end of 2018, and $605,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 6% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 8% during 2019. A. Determine the bad debt estimation for 2018. $fill in the blank 1 B. Determine the bad debt estimation for 2019. $fill in the blank 2USE TGHE FOLLOWING TO SOLVE FOR QUESTION7 ONLY Tooele Company’s controller estimated bad debt expense using the percentage of accountsreceivable method. Total sales for the year were $500,000 of which 250,000 are on account.The ending balance in accounts receivable was $100,000. An examination of the outstandingaccounts at the end of the year indicates that approximately 12 percent of these accounts willultimately prove to be uncollectible. Before any adjusting entries, the balance in theAllowance for Doubtful Accounts is $700 (CREDIT). Which is part of the correct adjustingentry to record bad debt expense for the year?(The Allowance for Doubtful Accounts is also known as the Allowance for Bad Debts or theAllowance for Uncollectible Accounts.)a. CREDIT Allowance for Bad Debts for $11,300b. DEBIT Allowance for Bad Debts for $11,300c. CREDIT Allowance for Bad Debts for $12,000d. CREDIT Allowance for Bad Debts for $12,700e. DEBIT Allowance for Bad Debts for $14,700 5. Use the…In 2020, Maxton Company sold its services on credit in the amount of $988,400. Total cash collections during the year were $790,720. The company determined that $4,942 of accounts receivable would not be collected and wrote them off. At the end of 2020, management decided to increase its estimate of bad debt to 1% of credit sales compared to 0.5% from last year due to the amount of accounts receivable that proved to be uncollectible during the year. At the beginning of 2020, the company had $152,900 in accounts receivable and a credit balance of $4,600 in allowance for doubtful accounts. Assume the company has a year end of December 31. Do not enter dollar signs or commas in the iaput boxes. Round your answers to the nearest whole number. a) Prepare the necessary journal entries to record all 2020 transactions including sales on account, collection, the write-off and the new allowance amount. To simplify the transactions, all dates will be December 31. write-off and the new allowance…
- Doors Inc.’s condensed income statement and balance sheet for the years 2022 and 2021 follow. Accounts Receivable increased 50 percent from 2021 to 2022. There were no new purchases of land, property, or equipment in 2022. Accounts Payable decreased 40 percent from 2021 to 2022. No new shares of common stock were issued in 2022. The company paid out cash dividends of $85,670 in 2022. The inventory turnover ratio for 2022 was 6 times. The asset turnover ratio in 2022 was 2.5 times and in 2021 was 2.9 times. The earnings per share in 2022 was $68.21 and in 2021 was $75.18. The effective income tax rate in both years was 20 percent.Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods?Clock Company showed the following errors in their account during December 31, 2021: Dividends of P 100,000 had been declared but was not recorded on December 10, 2021. Buildings and equipment maintenance for P 480,000 had been debited to expense at the end of April 2020. It had an estimated life of 8 years. The company failed to record sales commissions payable amounting to P 10,500 and P 19,000 at the end of 2020 and 2021, respectively. Supplies on hand amounting to P 6,000 and P 15,000 were not recognized at the end of 2020 and 2021, respectively. What is the net effect of the error in the 2021 net income? a.P 59,500 over b.P 72,200 under c.P 75,000 over d.P 70,000 over