JOY Corporation provides an allowance for its doubtful accounts receivable. allowance account had a credit balance of P8,000. Each month JOY accrues bad debts expense in an amount equal to 2% of credit sales. Total credit sales during 2016 amounted to P2,000,000. During 2016 uncollectible accounts receivable totaling P22,000 were written off against the allowance account. An aging of accounts receivable at December 31, 2016 indicates that an allowance of P42,000 should be provided for doubtful accounts as of the date. Accordingly, bad debts expense previously accrued during 2016 should be increased by At December 31, 2015, the

JOY Corporation provides an allowance for its doubtful accounts receivable. allowance account had a credit balance of P8,000. Each month JOY accrues bad debts expense in an amount equal to 2% of credit sales. Total credit sales during 2016 amounted to P2,000,000. During 2016 uncollectible accounts receivable totaling P22,000 were written off against the allowance account. An aging of accounts receivable at December 31, 2016 indicates that an allowance of P42,000 should be provided for doubtful accounts as of the date. Accordingly, bad debts expense previously accrued during 2016 should be increased by At December 31, 2015, 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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The following information is extracted from Shelton Corporation’s accounting records at the beginning of 2016: Accounts Receivable $64,000 Allowance for Doubtful Accounts 1,100 (credit) During 2016, sales on credit amounted to $568,000, $559,000 was collected on outstanding receivables and $2,500 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. 1. Prepare the journal entry necessary to record Shelton’s estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton’s December 31, 2016, balance sheet. 3. Compute Shelton’s receivables turnover. (Round to one decimal place.)
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Jarden Company has credit sales of $3,600,000 for year 2017. On December 31, 2017, the company's Allowance for Doubtful Accounts has an unadjusted credit brence of $14,500. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of pust experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. Expected Percent December 31, 2017 Accounts Receivable. $830,000 254,000 86,000 38,000 12,000 Accounts receivable Required: 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts rece method. X Not due: 1 to 30 31 to 60: 61 to 90: Over 90: Estimated balance of allowance for uncollectibles x X Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due X X Percent uncollectible (#.##%) # Uncollectible 1.25% 2.00 6.50 32.75 68.00 Estimated…
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From inception of operations to December 31, 2015, Harris Corporation provided for uncollectible accounts receivable under the allowance method. Provisions were made monthly at 2% of credit sales; bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account; and no year-end adjustments to the allowance account were made. Harris’s usual credit terms are net 30 days. The balance in the Allowance for Doubtful Accounts was $130,000 at January 1, 2016. During 2016, credit sales totaled $9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Harris upgraded its computer facility in November 2016, and an aging of accounts receivable was prepared for the first time as of December 31, 2016. A summary of the aging is as follows: Classification by Balance in Each…
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The recorded allowance for doubtful accounts should be increased by
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