Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $440,000, Allowance for Doubtful Accounts has a credit balance of $4,000, and sale for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $21,600. a. Determine the amount of the adjusting entry for uncollectible accounts. 22,400 X b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts 421,600 X 18,400 X 22,400 X Bad Debt Expense c. Determine the net realizable value of accounts receivable 417,600 X
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $440,000, Allowance for Doubtful Accounts has a credit balance of $4,000, and sale for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $21,600. a. Determine the amount of the adjusting entry for uncollectible accounts. 22,400 X b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts 421,600 X 18,400 X 22,400 X Bad Debt Expense c. Determine the net realizable value of accounts receivable 417,600 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Analysis of Receivables Method
At the end of the current year, Accounts Receivable has a balance of $440,000, Allowance for Doubtful Accounts has a credit balance of $4,000, and sales
for the year total $1,980,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $21,000.
Show Me How
a. Determine the amount of the adjusting entry for uncollectible accounts.
22,400 X
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
Accounts Receivable
Allowance for Doubtful Accounts
421,600 X
18,400 X
22,400 X
Bad Debt Expense
c. Determine the net realizable value of accounts receivable.
417,600 X
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The analysis of receivables method is based on the assumption that the longer an account receivable is outstanding the less kaly that it will be
collected
The amount of the adjusting entry the amount that will yield an adjusted balance for allowance for Doubthul Accounts.
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835 PM
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