FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
i need the answer quickly
Innovative Tech Incorporated (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI
sold services on account for $100,000 and estimated that 1/4 of 1 percent of those sales would be uncollectible.
Required:
1. Prepare the November adjusting entry for bad debts.
2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $91,100,
aged as follows: (1) 1 to 30 days old, $76,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $4,100. The average rate
of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Prepare a
schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts.
3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,650 credit balance at December 31.
Prepare the December 31 adjusting entry.
4. Show how the various accounts related to accounts receivable should be shown on the December 31 balance sheet.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3 Required 4
Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is
$91,100, aged as follows: (1) 1 to 30 days old, $76,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old,
$4,100. The average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44
percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful
Accounts.
Accounts Receivable
Estimated Uncollectible (%)
Estimated Uncollectible ($)
1 to 30
31 to 90
Over 90
Total
$
0
$
0
< Required 1
Required 3 >
Show less▲
expand button
Transcribed Image Text:Innovative Tech Incorporated (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $100,000 and estimated that 1/4 of 1 percent of those sales would be uncollectible. Required: 1. Prepare the November adjusting entry for bad debts. 2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $91,100, aged as follows: (1) 1 to 30 days old, $76,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $4,100. The average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,650 credit balance at December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts related to accounts receivable should be shown on the December 31 balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $91,100, aged as follows: (1) 1 to 30 days old, $76,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $4,100. The average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Accounts Receivable Estimated Uncollectible (%) Estimated Uncollectible ($) 1 to 30 31 to 90 Over 90 Total $ 0 $ 0 < Required 1 Required 3 > Show less▲
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education