Concept explainers
Accounting for uncollectible accounts using the allowance method and reporting net accounts receivable on the
Crystal Clear Cleaning uses the allowance method to estimate
Jan. 1 Performed cleaning service for Debbie's D-list for $9,000 on account with terms 3/10, n/20.
10 Borrowed money from High Roller Bank, $20,000, making a 180 day, 15% note.
12 After discussions with Merry Cleaners, Crystal Clear has determined that $275 of the receivable owed will not be collected. Wrote off this portion of the receivable.
15 Sold goods to Westford for $8,000 on account with terms 5/10, n/30. Cost of Goods Sold was $400.
28 Sold goods to Meaghan, Inc. for cash of $2,000 (cost $350).
28 Collected from Merry Cleaners, $275 of receivable previously written off.
29 Paid cash for utilities of $450.
31 Created an aging schedule for Crystal Clear for accounts receivable. Crystal Clear determined that $8,100 of receivables were 5% uncollectible, $9,775 of receivables were 15% uncollectible, and $850 of receivables were 30% uncollectible. Crystal Clear determined the total amount of estimated uncollectible receivables and adjusted the Allowance for Bad Debts assuming a credit balance of $240 in the account. (Round to nearest whole dollar.)
Requirements
1. Prepare all required
2. Show how net accounts receivable would be reported on the balance sheet as of January 31, 2018.
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Horngren's Accounting (11th Edition)
- Catherines Cookies has a beginning balance in the Accounts Receivable control total account of $8,200. $15,700 was credited to Accounts Receivable during the month. In the sales journal, the Accounts Receivable debit column shows a total of $12,000. What is the ending balance of the Accounts Receivable account in the general ledger?arrow_forwardOn 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts asbelow. Ignore GST. Account Receivable 1/6 balance Dr 849,555 Allowance for Doubtful debt 1/6 balance Cr 12,100 During June, the following transactions occurred:1. Revenue earned on credit, $1,195,000.2. Sales returns, $24,100.3. Accounts receivable collected, $1,400,000.4. Accounts written off as uncollectable, $15,851.Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance forDoubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June.Ignore GST.Required:(a) Prepare general journal entries to record the four transactions and to adjust the Allowance forDoubtful Debts account. (b) Show how accounts receivable and the allowance for doubtful debts would appear on the balancesheet at 30 June. (c) On…arrow_forwardOn January 1 five star services has the following balances accounts receivable $26,000 debit bad debt expense zero dollars. Five star services has the following transactions during January, credit sales of $100,000, collections of credit sales of $87,000, and right off of $18,000. Five star Services used the direct write off method. At the end of January the balance of accounts receivable is?arrow_forward
- 1. Record the January 1 credit balance of $26,000 in a T account for Allowance for Doubtful Accounts. 2. Journalize the transactions. Post each entry that affects the following selected T ac- counts and determine the new balances: Allowance for Doubtful Accounts Bad Debt Expense 3. Determine the expected net realizable value of the accounts receivable as of December 31. bacing the provision for uncollectible accountsS on anarrow_forwardAccounting for uncollectible accounts using the allowance (percent of-sales) and direct write-off methods and reporting receivables on the balance sheet On August 31, 2018, Forget-Me-Not Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Forget-Me-Not made the following transactions: Sales on account, $530,000. Ignore Cost of Goods Sold. Collections on account, $573,000. Write-offs of uncollectible receivables, 56,000. Requirements Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Using the same facts, assume that Forget-Me-Not used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad…arrow_forwardBanning Company uses the alowance method to account for uncolectible receivables. At the beginning of the year. Allowance for Bad Debts had a credit balance of $1,400 During the year Banning wrote off uncollectible recevabies of $2.300. Barning recorded Bad Debts Expense of $2,700 What is Barning's year-end balance in Alowance for Bad Debts? OA $1,800 OB $400 OC $4,100 OD $5,000 Time Remaining: 01:17:13 Nextarrow_forward
- On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST. Accounts receivable 1/6 balance 849,555 Allowance for doubtful debts 1/6 balance 12,100 During June, the following transactions occurred: Revenue earned on credit, $1,195,000. Sales returns, $24,100. Accounts receivable collected, $1,400,000. Accounts written off as uncollectible, $15,851. Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June. Ignore GST. Required: (a) Prepare general journal entries to record the four transactions and to adjust the Allowance for Doubtful Debts account. (b) Showhowaccountsreceivableandtheallowancefordoubtfuldebtswouldappearonthebalance sheet at 30 June. (c) On 29 June, Kim Ltd, whose $2,400 account had been written off as uncollectable in June,…arrow_forwardOn 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST. Account Receivables: 1/6 Balance 849,555 Allowance for Doubtful Debts: 1/6 Balance 12,100 During June, the following transactions occurred: 1. Revenue earned on credit, $1,195,000. 2. Sales returns, $24,100. 3. Accounts receivable collected, $1,400,000. 4. Accounts written off as uncollectable, $15,851. Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June. Ignore GST. Required: a) Prepare general journal entries to record the four transactions and to adjust the Allowance for Doubtful Debts account. (b) Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet…arrow_forwardOn 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST. Accounts receivable 1/6 Balance 849,555 Allowance of Doubtful debt 1/6 Balance 12,100 During June, the following transactions occurred: 1. Revenue earned on credit, $1,195,000. 2. Sales returns, $24,100. 3. Accounts receivable collected, $1,400,000. 4. Accounts written off as uncollectable, $15,851. Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful Debts account should have a credit balance of $13,500 on the balance sheet as at 30 June. Ignore GST. Required: (a) Prepare general journal entries to record the four transactions and to adjust the Allowance for Doubtful Debts account. (b) Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June. (c) On 29 June, Kim Ltd, whose $2,400 account had been…arrow_forward
- Using the following accounts, complete all journal entries: Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Credit Card Expense Sales Discount Sales Revenue Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. PLEASE NOTE: All dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Record the year-end adjusting entry for 2018 bad debt using the income statement method. DR CR Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. DR CR Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. Income Statement Method: DR…arrow_forwardGideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. The entry or entries Gideon makes to record the recovery of the bad debt is: Multiple Choice Account Title Credit Accounts Receivable-A. Hopkins Debit 2,000 Allowance for Doubtful Accounts 2,000 Cash 2,000 Accounts Receivable-A. Hopkins 2,000 Account Title Debit Credit Cash 2,000 Accounts Receivable-A. Hopkins 2,000 Account Title Debit Credit Accounts Receivable-A. Hopkins 2,000 Bad debts expense 2,000arrow_forwardJournalise the following transactions in the books of Glenmore International- Note- Allowance for doubtful accounts has a debit balance of $400 and balance in accounts receivables is $80,000 The company estimated bad debts to be 2% of Accounts receivables. The account of Jack Nelson has declared uncollectible with $4000 A customer Frank Leon, whose account was declared uncollectible has paid in full $8500 that he owed to the company. DO NOT GIVE SOLUTION IN IMAGE FORMATarrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning