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At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days Current past due past due $42,000 $31,500 $5,000 Accounts receivable Allowance for doubtful accounts $154,000 Bad debt expense 4,500 (credit balance) $ Date No 1 Dec. 31 2,000 119,500X $ 2,000X 1% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) 2% 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 31-60 days General Journal 10% Over 60 days past due $6,500 Bad debt expense Allowance for doubtful accounts 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 30% Debit 2,000X Credit 2,000 X

At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days Current past due past due $42,000 $31,500 $5,000 Accounts receivable Allowance for doubtful accounts $154,000 Bad debt expense 4,500 (credit balance) $ Date No 1 Dec. 31 2,000 119,500X $ 2,000X 1% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) 2% 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 31-60 days General Journal 10% Over 60 days past due $6,500 Bad debt expense Allowance for doubtful accounts 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 30% Debit 2,000X Credit 2,000 X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days 31-60 days Current past due past due $42,000 $31,500 $5,000 10% Accounts receivable Allowance for doubtful accounts Bad debt expense $154,000 Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) No 4,500 (credit balance) 1 $ Date Dec. 31 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 2,000 119,500X $ 2,000X 1% 2% 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Over 60 days past due $6,500 30% General Journal Bad debt expense Allowance for doubtful accounts Debit 2,000 X Credit 2,000 X
Transcribed Image Text:At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days 31-60 days Current past due past due $42,000 $31,500 $5,000 10% Accounts receivable Allowance for doubtful accounts Bad debt expense $154,000 Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) No 4,500 (credit balance) 1 $ Date Dec. 31 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 2,000 119,500X $ 2,000X 1% 2% 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Over 60 days past due $6,500 30% General Journal Bad debt expense Allowance for doubtful accounts Debit 2,000 X Credit 2,000 X
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