Modern Machine Shop MMS Inc manufactures special

moulds that are #980

Modern Machine Shop (MMS) Inc. manufactures special moulds that are used in the production
of plastic toys. Below is MMS’s trade receivables ledger from October 1 to December 31,
2015:Additional information is as follows: a. MMS sold its special moulds at $ 500 each. b. All
sales were on credit with terms 2/ 10, n/ 30. c. MMS’s records included the following items and
their balances as at September 30, 2015:Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . $ 100,000Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500Allowance
for doubtful accounts (credit balance) . . . . . . . . . 1,300Required:1. Prepare the journal entries
to record the transactions on October 8, November 5, November 16, and December 20. 2. MMS
uses the aging of trade receivables method to determine the amount of receivables that may not
be collectible in the future. Its estimated uncollectible rates are as follows:Determine the amount
of receivables that may not be collectible in the future, and prepare the journal entry to record
bad debt expense on December 31, 2015. Show your calculations. (Hint: You may wish to keep
track of trade receivables in order to determine the age of these receivables.) 3. MMS’s cost of
sales is $ 60,000 for 2015. Compute and evaluate MMS’s gross profit percentage for 2015.
MMS’s gross profit percentages were 35 percent and 40 percent for 2013 and 2014,
respectively.View Solution:
Modern Machine Shop MMS Inc manufactures special moulds that are

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