2008 CUMULATIVE REVIEW PROBLEM: CHAPTER 7 The purpose chapter and of this proble

Question

2008 CUMULATIVE REVIEW PROBLEM: CHAPTER 7 The purpose chapter and of this problem is to provide an opportunity to review both nevw concepts in the current d major concepts in previous chapters. This cumulative review should asst you in but ing accounting concepts and preparing for exanms UTRED: Use the following information for the five questions which follow. On December 31, 2011, the unadjusted trial balance of Pete Inc, included the following accounts: Credit $900,000 Debit Sales (90% represent credit sales) Accounts Receivable Allowance for Doubtful Accounts $300,000 300

Explanation / Answer

credit sales

900000*90%

810000

1-

bad debt expense

7800

allowance for doubtful debt

7800

(810000*1%)-300

2-

bad debt expense

8700

allowance for doubtful debt

8700

(300000*3%)-300

3-

Amount of realizable value of accounts receivables

300000-8700

291300

4-

allowance for doubtful debt

800

Accounts receivables

800

5-

Amount of realizable value of accounts receivables

291300

credit sales

900000*90%

810000

1-

bad debt expense

7800

allowance for doubtful debt

7800

(810000*1%)-300

2-

bad debt expense

8700

allowance for doubtful debt

8700

(300000*3%)-300

3-

Amount of realizable value of accounts receivables

300000-8700

291300

4-

allowance for doubtful debt

800

Accounts receivables

800

5-

Amount of realizable value of accounts receivables

291300

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