AutoSave OFFHome Insert DrawPastePage 47 of 95CalibriB I U20DesignVv16916 words50abX2VLayoutXΑ Α΄AReferencesAa ▾ AΑνEnglish (United States)Mailings=ReviewVVW= Packet Lecture-4View12/31싫VAccessibility: InvestigateTell me30,000VEstimating Uncollectible AccountsAn estimate of bad debts is made at the end of the accounting period to match the cost ofcredit sales (bad debt expense) with the revenue credit sales allowed the company to recordduring the period. The estimate is incorporated in the company's books through an ADJUSTINGENTRY and the entry increases the allowance for uncollectible accounts and bad debt expense.Saved to my Mac ✓Percent of Receivables Method (an allowance method)management estimates a percent of ending accounts receivable they expect to be uncollectiblethe ending balance of the Allowance for Uncollectible Accounts (AUA) is determined based onthe estimate (% of uncollectible accounts x ending balance of A/R, "% of A/R"). Example:Management estimates 5% of their $50,000 of remaining accounts receivables (ending balance)to be uncollectible. Therefore, the ending balance in the AUA needs to be $2,500 (5% x$50,000).A/R30,000AaBb CcDdEerecord the adjusting entry to get the ending balance in the Allowance for uncollectible accounts(AUA) to be equal to the amount computed (% of A/R). Example: The ending balance in theAUA needs to be $2,500. Before the adjusting entry the balance is $200 credit. To get thebalance to be $2,500, an adjusting entry for $2,300 is needed.Bad Debt Expense1 JRC NormalPractice At the end of the year, D Company's balance in the allowance for uncollectibleaccounts (AUA) was $500 (credit) before adjusting entries. The balance in Accounts Receivableis $30,000. The company estimates that 15% of the accounts will not be collectible. Preparethe adjusting entry for uncollectible accounts using the precent of receivables method.AaBbCcDdEeA/RCaptionAaBb CcDdFHeading 1What should D report as bad debt expense on their 12/31 Income Statement?D would report net accounts receivable on their 12/31 Balance Sheet at:Allowance for uncollectible accounts500Allowance for uncollectible accounts500$Allowance for uncollectible accountsAaBbCcDdEHeading 2AaBbCcDdEHeading 3FocusAaBbCcDdEHeading 4EShareFBIEditingStyles DictatePaneCommentsEEditor100%

Allowance for Uncollectable Amount Because it lowers the value of an asset—in this case, the…

Practice At the end of the year, D Company's balance in the allowance for uncollectible accounts (AUA) was $500 (credit) before adjusting entries. The balance in Accounts Receivable is $30,000. The company estimates that 15% of the accounts will not be collectible. Prepare the adjusting entry for uncollectible accounts using the precent of receivables method. 12/31 30,000 A/R Bad Debt Expense 30,000 Allowance for uncollectible accounts 500 What should D report as bad debt expense on their 12/31 Income Statement? D would report net accounts receivable on their 12/31 Balance Sheet at: A/R Allowance for uncollectible accounts 500 $ $ Allowance for uncollectible accounts

Practice At the end of the year, D Company's balance in the allowance for uncollectible accounts (AUA) was $500 (credit) before adjusting entries. The balance in Accounts Receivable is $30,000. The company estimates that 15% of the accounts will not be collectible. Prepare the adjusting entry for uncollectible accounts using the precent of receivables method. 12/31 30,000 A/R Bad Debt Expense 30,000 Allowance for uncollectible accounts 500 What should D report as bad debt expense on their 12/31 Income Statement? D would report net accounts receivable on their 12/31 Balance Sheet at: A/R Allowance for uncollectible accounts 500 $ $ Allowance for uncollectible accounts

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 the end of the current year, Accounts Receivable has a balance of $195,120; Allowance for Doubtful Accounts has a debit balance of $4,422; and sales for the year total $1,086,000. Bad debt expense is estimated at 3% of sales. a. Determine the amount of the adjusting entry for bad debt expense.$fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Accounts Receivable $fill in the blank 2 Allowance for Doubtful Accounts fill in the blank 3 Bad Debt Expense fill in the blank 4 c. Determine the net realizable value of accounts receivable.$fill in the blank 5
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $630,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,840,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $25,400. a. Determine the amount of the adjusting entry for uncollectible accounts. 22,900 X b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable. 601,200 X Feedback 630,000 ✓ 28,400 X 22,900 X Check My Work The analysis of receivables method is based on the assumption that the longer an account receivable is outstanding the less likely that it will be collected. The amount of the adjusting entry is the amount that will yield an adjusted balance for Allowance for Doubtful Accounts.
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balance of $6,000; and sales for the year total $3,040,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $21,600. a. Determine the amount of the adjusting entry for uncollectible accounts.$ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.$
Use the following to answer questions 12 – 15 At December 31, KC Co reported accounts receivable of $56,000 and an allowance for uncollectible accounts of $300 (credit). suggests that the allowance for uncollectible accounts should be 8% of accounts receivable. An analysis of accounts receivable 12. $4 Estimate the amount of uncollectible receivables: 13. When recording the adjusting entry for bad debt expense how much should Allowance for Uncollectible accounts be credited? 14. On January 10, a customer's account balance of $800 is written off as uncollectible. Record the write-off. 15. $ If Net Accounts receivable were $50,000 before the write-off, how much are Net Accounts receivable AFTER the write-off?
Allowance for Doubtful Accounts has a debit balance of $439 at the end of the year (before adjustment), and Bad Debt Expense is estimated at 1% of sales. If net credit sales are $928,100, the amount of the adjusting entry to record the estimate of the uncollectible accounts is a.$8,842 b.$9,720 c.$439 d.$9,281
Beginning balances: Allowance for Doubtful Accounts - $45,000 Accounts Receivable - $3,000,000 Bad Debt percent of credit sales – 1.5% Total Credit Sales – $38,000,000 1) Estimate bad debt expense using percent of sales method 2) Record transaction. 3) Show new adjusted allowance account 4) In January the next year, $48,000 is determined to be uncollectible. Show the entry and adjust accounts.
[ * Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $134,500, and it estimates that 4% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (Algo) Percent of accounts receivable method LO P3 (a) a $2,287 credit balance before the adjustment. (b) a $673 debit balance before the adjustment. View transaction list
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At year end, the company’s aged list of Accounts receivable showed the following breakdown. The adjusted balance for the allowance of doubtful accounts, at year end is a $5,600 debit. Days outstanding Outstanding Balances Estimated % Uncollectible 0 – 30 days $234,000 5% 31 – 90 days 54,300 10% Over 90 days 21,300 20% Instructions: Calculate the bad debt expense for the year. Enter your answer into the following box (nearest dollar amount without dollar sign or comma, e.g. 15000). Answer:
Chapter 5: Receivables and Sales A company reports the following amounts at 12/31/YR2 (before any year-end adjustment). Management estimates 8% of the receivables will not be collectible. The company uses the percent-of-receivables method to determine bad debt expense. Credit sales for the year 1,000,000 Accounts receiyable (A/R) 90,000 Allowance for uncollectible accounts ("AUA") 1,800 Credit Bal. Estimated percent uncollectible. 6.0% Create T accounts for A/R, AUA and Bad debt expense to help with the following questions. Accounts Receivable AUA Bad Debt Expense How much of the Accounts Receivable does management not expect to collect? What amount will the company record as bad debt expense for the YR2? What amount will be shown on the 12/31 balance sheet for Net Accounts Receivable? 1 2 3 On January 5, YR3, the company writes off an A/R they determined is uncollectible. After the write off, what is the balance in AUA? The 4 amount of the write-off is: 200 After the write off, what…
nalysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $565,000, Allowance for Doubtful Accounts has a credit balance of $5,000, and sales for the year total $2,540,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $26,000. a. Determine the amount of the adjusting entry for uncollectible accounts.$fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $fill in the blank 2 Allowance for Doubtful Accounts $fill in the blank 3 Bad Debt Expense $fill in the blank 4 c. Determine the net realizable value of accounts receivable.$fill in the blank 5