FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Brown Cow Dairy uses the aging approach to estimate
Data during the current year follow:
a. During December, an Account Receivable (Patty's Bake Shop) of $610 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt.
b. On December 31, the appropriate adjusting entry for the year was recorded.
Required:
1. Give the required
2. Show how the amounts related to
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- please provide the answer with explanationarrow_forwardYoung and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $118,000 of young accounts and $320,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $32,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $4,200, how much should be credited to the account? 1 Amount to be Reported 2. Amount to be Credited 3. Amount to be Creditedarrow_forwardHIRDT CO. USES THE PERCENTAGE-OF- RECEIVABLES BASIS TO RECORD BAD DEBT EXPENSE AND CONCLUDES THAT 3% OF ACCOUNTS RECEIVABLE WILL BECOME UNCOLLECTIBLE. ACCOUNTS RECEIVABLE ARE $401,100 AT THE END OF THE YEAR, AND THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAS A CREDIT BALANCE OF $3,110. IF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS HAD A DEBIT BALANCE OF $890 INSTEAD OF A CREDIT BALANCE OF $3,110, PREPARE THE ADJUSTING JOURNAL ENTRY FOR BAD DEBT EXPENSE.arrow_forward
- solve this pleasearrow_forwardDetermine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $350 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $7,220. Amount added Ending balance b. Credit balance of $350 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% of credit sales, which totaled $980,000 for the year. Amount added Ending balance MacBook Proarrow_forwardTwilight Company uses the aging of accounts recelvable method to estimate Bad Debt Expense. The balance of each account receivable is aged 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. Based on experience, management has estimated what portion of recelvables of a specific age will not be paid as follows: (1) 2%, (2) 13%, and (3) 34%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $150. The total Accounts Receivable in each age category were: (1) 1-30 days old, $58,000, (2) 31-90 days old, $19,000, and (3) more than 90 days old, $3,000. Required: a. Calculate the estimate of uncollectible accounts at December 31, 2019. b. Prepare the appropriate adjusting entry dated December 31, 2019.arrow_forward
- vin.3arrow_forwardCasilda 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, $51,300; (2) up to 180 days past due, $14,800; and (3) more than 180 days past due, $5,000. 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) 4 percent, (2) 13 percent, and (3) 31 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: 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 tabs below. Required 1 Required 2 Show how the various accounts related to accounts…arrow_forwardWohoo Publishers uses the allowance method to estimate uncollectible accounts receivables. The company produced the following aging of the accounts receivable at year-end (Y in thousands). Accounts receivable % uncollectible Estimated bad debts Total 200,000 0-30 days 77,000 2% 31-60 days 46,000 5% 61-90 days 91-120 days 39,000 6% 23,000 10% Over 120 days 15,000 25%arrow_forward
- Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 3% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $108,000 of young accounts and $480,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $48,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $5,800, how much should be credited to the account? Answer is complete but not entirely correct. 1. Amount to be Reported 2$ 195,240 V 2. Amount to be Credited $ 195,240 x 3. Amount to be Credited 189,440 Xarrow_forwardCompare Two Methods of Accounting for Uncollectible Receivables Call Systems Company, a telephone service and supply company, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the company is considering changing to the allowance method. Information is requested as to the effect that an annual provision of 2% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts: Year of Origin of Accounts Receivable Written Off as Uncollectible Uncollectible Accounts Year Sales 1st 2nd 3rd 4th Written Off 1st $1,200,000 $1,100 $1,100 2nd 1,720,000 2,900 1,350 $1,550 3rd 2,690,000 11,700…arrow_forwardS&R Company uses the aging of accounts receivable approach to estimate bad debt expense. On December 31, an analysis of accounts receivable revealed the following: Schedule of Accounts Receivable by Age December 31, 2022 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollect 130,000 50,000 18,000 3,000 9,000 210,000 Not yet due 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Required: (a) Calculate the amount of allowance for doubtful accounts that should be reported on the balance sheet at December 31, 2022. (b) Calculate the amount of bad debts expense that should be reported on the 2022 income statement, assuming that the balance of Allowance for Doubtful Accounts on January 1 was $46,000 (credit balance) and accounts receivable written off during the year totaled $49,000 (c) Present the appropriate general journal entry to record bad debts expense on December 31, 2022. (d) Show how accounts receivable will appear on the balance…arrow_forward
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