FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the
balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule.
During July to December of 20X7, Texas Gulf Carts completed the following transactions:
August 9
Made a compound entry to write off uncollectible
accounts: J. Aguilar, $200; Scaton Co., $100; and T.
Taylor, $700.
Sept. 30
Recorded uncollectible account expense equal to 1%% of credit
sales of $140,000
Oct. 18
Wrote off accounts receivable as uncollectible the $500 account
receivable from Lantz Co. and the $400 ac
unt receivable from
Navisor Corp.
Dec. 31
Recorded uncollectible-account expense based on the aging of
reccivables, which follows:
Age of Accounts
1-30
31 - 60
61 – 90
Over 90
Total
Days
Days
Days
Days
$163,000
$100,000
$40,000
$14,000
9,000
Estimated percent uncollectible
0.1%
0.5%
5%
30%
Required:
a. Record the transactions in the journal.
b. Open the Allowance for Uncollectible Account and post entries affecting that
account. Keep a running balance.
c. Show how Texas Gulf Carts should report accounts receivable on its balance
sheet at December 31, 20X7.
Question 4
The June 30, 20X 9, balance sheet of Ram Technologies reports the following:
Accounts Receivable...
Allowance for Uncollectible Accounts (Cr).....
$265,000
7,100
At the end of each quarter, RAM estimates uncollectible-account expense to be 2% of credit sales.
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Transcribed Image Text:of credit sales. At the end of the year, the company ages its accounts receivable and adjusts the balance in the Allowance for Uncollectible Accounts to correspond to the aging schedule. During July to December of 20X7, Texas Gulf Carts completed the following transactions: August 9 Made a compound entry to write off uncollectible accounts: J. Aguilar, $200; Scaton Co., $100; and T. Taylor, $700. Sept. 30 Recorded uncollectible account expense equal to 1%% of credit sales of $140,000 Oct. 18 Wrote off accounts receivable as uncollectible the $500 account receivable from Lantz Co. and the $400 ac unt receivable from Navisor Corp. Dec. 31 Recorded uncollectible-account expense based on the aging of reccivables, which follows: Age of Accounts 1-30 31 - 60 61 – 90 Over 90 Total Days Days Days Days $163,000 $100,000 $40,000 $14,000 9,000 Estimated percent uncollectible 0.1% 0.5% 5% 30% Required: a. Record the transactions in the journal. b. Open the Allowance for Uncollectible Account and post entries affecting that account. Keep a running balance. c. Show how Texas Gulf Carts should report accounts receivable on its balance sheet at December 31, 20X7. Question 4 The June 30, 20X 9, balance sheet of Ram Technologies reports the following: Accounts Receivable... Allowance for Uncollectible Accounts (Cr)..... $265,000 7,100 At the end of each quarter, RAM estimates uncollectible-account expense to be 2% of credit sales.
Perry Materials uses the aging method and has completed the following analysis of the accounts
receivable:
Over 90 Total
Balance
Customer
1-30 Days 31-60 Days 61-90 Days Days
Johnson
$4,600
$3,200
$7,800
Hot Pots, Inc.
800
1,000
1,800
Potter
40,000
550
40,550
Harrison
3,600
900
4,500
Marx
2,000
50
2,050
Younger
65,000
65,000
Merry Maids
5,900
5,900
Acher
12,000
6,400
18,400
Totals
$127,500
$13,750
$3,700 $1,050
$146,000
Uncollectible percentage
2%
10%
20%
40%
Estimated uncollectible
amount
$2,550
$1,375
$740
$420
$5,085
Required:
1. How much will the Uncollectible account expense for the year be?
2. What will the final balance in the Allowance account be, after adjusting for uncollectible
account expense?
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Transcribed Image Text:Perry Materials uses the aging method and has completed the following analysis of the accounts receivable: Over 90 Total Balance Customer 1-30 Days 31-60 Days 61-90 Days Days Johnson $4,600 $3,200 $7,800 Hot Pots, Inc. 800 1,000 1,800 Potter 40,000 550 40,550 Harrison 3,600 900 4,500 Marx 2,000 50 2,050 Younger 65,000 65,000 Merry Maids 5,900 5,900 Acher 12,000 6,400 18,400 Totals $127,500 $13,750 $3,700 $1,050 $146,000 Uncollectible percentage 2% 10% 20% 40% Estimated uncollectible amount $2,550 $1,375 $740 $420 $5,085 Required: 1. How much will the Uncollectible account expense for the year be? 2. What will the final balance in the Allowance account be, after adjusting for uncollectible account expense?
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