E6-14 (Algo) Recording and Reportinga Bad Debt Estimate Using AgingAnalysis LO6-2Casilda Company uses the aging approach to estimatebad debt expense. The ending balance of each accountreceivable is aged on the basis of three time periods asfollows: (1) not yet due, $50,800; (2) up to 180 days pastdue, $15,600; and (3) more than 180 days past due,$4,500. Experience has shown that for each age group,the average loss rate on the amount of the receivables atyear-end due to uncollectibility is (1) 2 percent, (2) 11percent, and (3) 31 percent, respectively. At December 31,the end of the current year, the Allowance for DoubtfulAccounts balance is $100 (credit) before the end-of-period adjusting entry is made.Required:1. Prepare the appropriate bad debt expense adjustingentry for the current year.2. Show how the various accounts related to accountsreceivable should be shown on the December 31,current year, balance sheet.

Bad debt expenses are the total expenses which will be uncollectable or irrecoverable in future…

1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet.

1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 11EA: Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables....

See similar textbooks

Similar questions

Tines Commerce computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $45,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $12,000. What should be the reported figure in the adjusting entry for the current period? A. $12,000 B. $45,000 C. $33,000 D. $57,000
Balloons Plus computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $84,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $26,000. What should be the reported figure in the adjusting entry for the current period? A. $84,000 B. $58,000 C. $26,000 D. $110,000
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.
Entries for bad debt expense under the direct write-off and allowance methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: A. Journalize the transactions under the direct write-off method. B. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of 36,000 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: C. How much higher (lower) would Rustic Tables net income have been under the direct write-off method than under the allowance method?
Saved Help Save & Exit Check E6-23 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis LO6-2 Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,500; (2) up to 120 days past due, $7,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 10 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $740 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: a. During December, an Account Receivable (Patty's Bake Shop) of $690 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31,…
Saved Help Save E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $51,600; (2) up to 180 days past due, $15,300; and (3) more than 180 days past due, $4,200. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2) 12 percent, and (3) 32 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $300 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet. Complete this question by entering…
E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $51,900; (2) up to 180 days past due, $15,800; and (3) more than 180 days past due, $5,300. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2) 11 percent, and (3) 30 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet. Complete this question by entering your answers in the…
Twilight Company uses the aging of accounts recelvable method to ostimate Bnd Debt Expense. The batance of each account recelveble is eged on the basis of three categories as follows: (1) 1-30 days old, (2) 31-90 days old, and (3) more than 90 days. old. Besed on expenence, manogement hos estimated what portion of recelvables of a specific age will not be pald as foltows: (1) 1\%, (2)15%, and (3)40%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtrul Accounts was$80. The total Accounts Recelvable in each oge category were: (1) 1.30 days old,$52,000. (2)31−90days old,$8,000, ond (3) more than 90 days old, $3,200 Required: a. Colculate the estimate of uncollectible accounts ot December 31, 2019.
E6-23 LO6-2 Recording, Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,000; (2) up to 120 days past due, $4,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 12 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $800 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: Required: 1. Give the required journal entries for the two items listed above. DATUM 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current…
E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 4% of receivables that are not yet due, 13% of receivables that are up to 180 days past due, and 31% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,100 that are up to 180 days past due, and $5,700 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet. Complete this question by entering your answers in the tabs below. Required 1…
Recording and Reporting a Bad Debt Estimate Using Aging Analysis E14-13 Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $295,000; (2) up to 120 days past due, $55,000; and (3) more than 120 days past due, $18,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2.5 percent, (2) 11 percent, and (3) 30 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of-period adjusting entry is made. Required: Prepare the appropriate bad debt expense adjusting entry for the current year. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet.
1 Calculate, record, post, and analyze the adjustment to recognize bad debt expense under the following information provided: Account DR CR Accounts receivable Allowance for doubtful accounts 365,000 15,000 Net credit sales 827,000 Amount % Estimated Total Estimated Number of Days Outstanding Receivable Uncollectible Uncollectible 0-30 175,000 1.00% 31-60 80,000 2.00% 61-90 50,000 42,000 18,000 5.00% Page 1 91-120 20.00% Over 120 40.00% TOTALS 365,000 Page 2 General Ledger Accounts Receivable A Allowance for Doubtful XA Bad Debt Expense E Debit Credit Debit Credit Debit Credit Transaction Analysis ASSETS LIABILITIES EQUITY REVENUES EXPENSES NET INCOME + General Journal DR CR 2 What is the net realizable value of Accounts receivable?