Problem #4 – 15 points

Grass Frog Company sells merchandise only on credit. For the year ended December 31, 2023, the following data are available. For maximum credit, show your calculations as much as possible for each question below.

Sales (all on credit)
$2,100,000
Accounts Receivable, January 1, 2023
305,000
Allowance for Doubtful Accounts, January 1, 2023 (credit)
25,000
Cash collections during 2023
1,980,000
Accounts written off as uncollected (default) during 2023
15,000

1. Determine the balance of Accounts Receivable for Grass Frog on December 31, 2023. 3 points.





2. Assume that the company estimates bad debts using the % of credit sales method, and in 2023 estimates bad debt at 4%. What amount will the company record as bad debt expense for 2023?
2 points.





3. What is net accounts receivable to be reported on Grass Frog’s Balance Sheet on December 31, 2023 if we continue to assume Grass Frog is using % credit sales method? 3 points.






4. Now assume the company estimates bad debts based on the A/R aging method. Using the space provided, estimate the ending balance in the Allowance for Doubtful Accounts on December 31, 2023. To be clear on your response, please circle your final answer. 3 points.

AGE CLASS

% UNCOLLECTIBLE

AMOUNT

Not Past Due

1%

$220,000

1-30 Days Past Due

5%

$110,000

31-60 Days Past Due

10%

$40,000

61-90 Days Past Due

25%

$30,000

Over 90 Days Past Due

50%

$10,000

5. Continuing to assume Grass Frog estimates bad debts using the A/R aging method, what journal entry would Grass Frog prepare to record bad debt expense for the year (show the debit, credit, and dollar amount in proper journal entry form)? 3 points.





6. Using the numbers provided above for the A/R aging method, how much did Grass Frog overestimate or underestimate bad debt in 2023? Be sure to clearly indicate if the $ amount is an overstatement OR understatement.1 point.

C. Fair Credit Reporting Act

Explanation:

Fair Credit Reporting Act was brought into action to lay governance on the credit bureaus regarding their consumers' credit information. The act presents the rules and regulations to be followed to obtain and present the credit details of the consumers. Also, it looks over the manner in which the details are shared with the consumers and others for various other purposes.

According to the given excerpt, the Fair Credit Reporting Act allows Carlos to take an action in case of any error found in his credit report.

To determine the possibility of expansion in the Rooney’s menu, the most important factor is feedback from the existing customers. Being a marketing consultant both internal and external factors must be considered. Internal factors - company's internal available resources such as fund, employees etc. Capabilities and strategies. 

External aspect is environmental context competitor's customer wants, needs and potentials. 

The correct answer to this open question is the following.

Although the question does not provide any options, we can say that the set of factors in the ethical decision-making process are individual, collective, and social.

Ethics and integrity should be "common sense." Moral values and attitudes are so important as key behaviors by the members of the organization. If employees are not guided by these concepts, the risk is that they could deviate from the guidelines and performance expected by the management.

The leader of the company and top management are the ones who have to set the example in order for the workers to follow those steps. The leader has to set an example of the conduct expected in the organization.

Assuming Dante earned 72.50 per week multiply 50 weeks is equal to 3625 yearly. It can be his employer deducted 500 federal tax as he earns low and doesn't need to pay tax so he can claim it by filing for refund. 

As it requires running informant wiretapping, training to keep tabs on everyone and threatening to charge them with critical offenses if they never turn states evidence. As it needs to be ability to monitor and interdict operations. This criminal intelligence itself is at its high risk of CR infringements.