Casebolt Company wrote off the following accounts receivable as uncollectible for thefirst year of its operations ending December 31:CustomerAmount$ 4,650Shawn BrookeEve Denton5,180Art Malloy11,050Cassie Yost9,120Total$30,000a. Journalize the write-offs under the direct write-off method.b. Journalize the write-offs under the allowance method. Also, journalize the adjustingentry for uncollectible accounts. The company recorded $5,250,000 of credit salesduring the year. Based on past history and industry averages, 4% of credit sales areexpected to be uncollectible.c. How much higher (lower) would Casebolt Company's net income have been underthe direct write-off method than under the allowance method?

Answered: Casebolt Company wrote off the…

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 31, Gill Company reported accounts receivable of $248.000 and an allowance for uncollectible accounts of $1,800 (debit before adjustment. An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjusting entry for uncollectible accounts would be Multiple Choice O O O $1,800 $7,440 $9,240 $5.840
The ledger of Teal Mountain Inc. at the end of the current year shows Accounts Receivable $74,000; Credit Sales $810,000; and Sales Returns and Allowances $36,000. If Teal Mountain uses the direct write-off method to account for uncollectible accounts, journalize the entry if on December 31 Teal Mountain determines that Matisse Company's $750 balance is uncollectible. (a) If Allowance for Doubtful Accounts has a credit balance of $1,400 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (b) If Allowance for Doubtful Accounts has a debit balance of $600 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable. (c) Prepare journal entries to record the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit (a) Dec.…
Subject: accounting
Steve Company estimates uncollectible accounts receivable using percentage of receivable method. During the month of August, the company wrote off a $7 ,000 receivable. Following the adjusting entry for August, the credit balance in the Allowance for Doubtful Accounts was $6,000 larger than it was on I August. What amount of bad debt expense was recorded for August? A: $5,000 B: $2,000 C: $3,000 D: $13,000
On January 1, Wei company begins the accounting period with a $34,000 credit balance in Allowance for Doubtful Accounts. 1. On February 1, the company determined that $7,600 in customer accounts was uncollectible; specifically, $1,300 for Oakley Co. and $6,300 for Brookes Co. Prepare the journal entry to write off those two accounts. 2. On June 5, the company unexpectedly received a $1,300 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.
The following account balances were taken from the adjusted trial balance for Shaw Messenger Service, a delivery service firm, for the fiscal year ended April 30, 2011: Depreciation Expense $14,500 875,000 Fees Earned 6,000 Insurance Expense Miscellaneous Expense Rent Expense Salaries Expense Supplies Expense Utilities Expense Prepare an income statement. Shaw Messenger Service 10,200 75,000 481,300 7,150 40,850 Income Statement For the Year Ended April 30, 20Y1 Line Item Description Amount Amount Expenses: Total expenses
Solstice Company determines on October 1 that it cannot collect $61,000 of its accounts receivable from its customer, P. Moore. Apply the direct write-off method to record this loss as of October 1. View transaction list Journal entry worksheet 1 Record the write-off an account. Note: Enter debits before credits. Date October 01 General Journal Debit Credit
On January 1, Wei Company begins the accounting period with a $30,000 credit balance in Allowance for Doubtful Accounts. a. On February 1, the company determined that $6,800 in customer accounts was uncollectible; specifically, $900 for Oakley Co. and $5,900 for Brookes Co. Prepare the journal entry to write off those two accounts. b. On June 5, the company unexpectedly received a $900 payment on a customer account, Oakley Company, that had previously been written off in part a. Prepare the entries to reinstate the account and record the cash received.
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount $ 21,550 Kim Abel Lee Drake 33,925 Jenny Green 27,565 Mike Lamb 19,460 Total $102,500
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Direct write-off methodJournalize the following transactions, using the direct write-off methodof accounting for uncollectible receivables:Mar. 17 Received $275 from Shawn McNeely and wrote off the remainder owed of $1,000 as uncollectible.July 29 Reinstated the account of Shawn McNeely and received $1,000cash in full payment.
Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables: Jan. 30. Sold merchandise on account to Jane Doe, $80,000. The cost of the merchandise sold was $45,000. June 3. Received $48,000 and wrote off the remainder owed on the sale of January 30 as uncollectible. Nov. 27. Reinstated the account that had been written off on June 3 and received cash in full payment.

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