am. 124.. 2. Estimating Uncollectible Accounts and Reporting Accounts Receivable: Collins Companyanalyzes its accounts receivable at December 31 and arrives at the age categories below alongwith the percentages that are estimated as uncollectible. The balance of the allowance foruncollectible accounts is $1,100 on December 31, before any adjustments.Age Group0-30 Days Past DueAccounts ReceivableEstimated Loss %1%2%5%10%25%31-60 Days Past Due61-120 Days Past Due121-180 Days Past DueOver 180 Days Past DueTotal A/R=$110,000$40,000$27,000$14,000$9,000$200,000a. What amount of bad debt expense will Collins reports in its income statement for theyear?Estimated bad debets = accoutns receivable Estimated loss under each group(110,000 1%) + ($40,000+2%) + ($27,000 + 5%) + ($14,000 10 %) + ($9,000 25%)= $6,900b. Use the financial statement effects template to record Collins' bad debt expense for theyear.Bad debets expense = Estimated bad debets - balance in allowance accountC.$6,900 $1,100= $5,800What is the balance of accounts receivable on its December 31 balance sheet?d. What is the amount (as a %) of estimated uncollectible receivables?

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2. Estimating Uncollectible Accounts and Reporting Accounts Receivable: Collins Company analyzes its accounts receivable at December 31 and arrives at the age categories below along with the percentages that are estimated as uncollectible. The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments. Age Group Accounts Receivable 0-30 Days Past Due 31-60 Days Past Due 61-120 Days Past Due 121-180 Days Past Due Over 180 Days Past Due Total A/R $110,000 $40,000 $27,000 $14,000 $9,000 $200,000 Estimated Loss % 1% 2% 5% 10% 25% a. What amount of bad debt expense will Collins reports in its income statement for the year? Estimated bad debets = accoutns receivable Estimated loss under each group (110,000 1 %) + ($40,000 2 %) + ($27,000 5% ) + ($14,000 10 %) + ($9,000 25%) = $6,900 . . b. Use the financial statement effects template to record Collins' bad debt expense for the year. Bad debets expense = Estimated bad debets - balance in allowance account $6,900 $1,100 = $5,800 c. What is the balance of accounts receivable on its December 31 balance sheet? d. What is the amount (as a %) of estimated uncollectible receivables?

2. Estimating Uncollectible Accounts and Reporting Accounts Receivable: Collins Company analyzes its accounts receivable at December 31 and arrives at the age categories below along with the percentages that are estimated as uncollectible. The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments. Age Group Accounts Receivable 0-30 Days Past Due 31-60 Days Past Due 61-120 Days Past Due 121-180 Days Past Due Over 180 Days Past Due Total A/R $110,000 $40,000 $27,000 $14,000 $9,000 $200,000 Estimated Loss % 1% 2% 5% 10% 25% a. What amount of bad debt expense will Collins reports in its income statement for the year? Estimated bad debets = accoutns receivable Estimated loss under each group (110,000 1 %) + ($40,000 2 %) + ($27,000 5% ) + ($14,000 10 %) + ($9,000 25%) = $6,900 . . b. Use the financial statement effects template to record Collins' bad debt expense for the year. Bad debets expense = Estimated bad debets - balance in allowance account $6,900 $1,100 = $5,800 c. What is the balance of accounts receivable on its December 31 balance sheet? d. What is the amount (as a %) of estimated uncollectible receivables?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 68E: Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule...

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AGING ACCOUNTS RECEIVABLE An analysis of the accounts receivable of Matsushita Company as of December 31, 20--, reveals the following: REQUIRED 1. Prepare an aging schedule as of December 31, 20--, by adding the following column to the three columns shown above: Estimated Amount Uncollectible. 2. Assuming that Allowance for Doubtful Accounts had a credit balance of 1,750 before adjustment, record the end-of-period adjusting entry in general journal form to enter the estimate for uncollectible accounts.
UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF RECEIVABLES Charlies Chevy Sales and Service estimates the amount of uncollectible accounts using the percentage of receivables method. Based on aging the accounts, it is estimated that 3,935 will not be collected. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 245. 2. Allowance for Doubtful Accounts has a debit balance of 560.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Parkers Nursery Supplies has a debit balance of 350,000. Credit sales are 2,300,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 1,920. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 24,560 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 1,280. (a) The percentage of sales method is used and bad debt expense is estimated to be of 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 22,440 in uncollectible accounts.
Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. The balance in Glencoes allowance for doubtful accounts at the beginning of the year was $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off. Required: 1. Determine bad debt expense. 2. Prepare the journal entry to record bad debt expense. 3. If Glencoe had written off $90,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed?
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Glenns Nursery Supplies has a debit balance of 390,000. Credit sales are 2,800,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 1,760. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 30,330 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 1,900. (a) The percentage of sales method is used and bad debt expense is estimated to be of 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 29,890 in uncollectible accounts.
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