Concept explainers
Providing for Doubtful Accounts
At the end of the current year, the
The allowance account before adjustment has a credit balance of $14,200.
The allowance account before adjustment has a credit balance of $14,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $45,400.
The allowance account before adjustment has a debit balance of $8,600. Bad debt expense is estimated at 1/4 of 1% of sales.
The allowance account before adjustment has a debit balance of $8,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $71,400.
Determine the amount of the
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps with 4 images
- Gregg company uses the allowance method for recording its expected credit losses. It estimates credit losses at 3% of credit sales, which were $900,000 during the year. On December 31 the accounts receivable balance was 150,000, and the allowance for doubtful accounts had a credit balance of 12,200 before adjustment. A. Prepare the adjusting entry to record the credit losses for the year. B. Show how accounts receivable and the allowance for doubtful accounts would appear in the December 31 balance sheet. The top 2 shaded blanks have the options of Bad debts expense, allowance for doubtful accounts. The bottom 2 shaded blanks have the options of accounts receivable, less: allowance for doubtful accounts.arrow_forwardProviding for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,132,000 and sales for the year total $12,840,000. The allowance account before adjustment has a credit balance of $15,300. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a credit balance of $15,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $49,000. The allowance account before adjustment has a debit balance of $9,200. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $9,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $76,400. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.arrow_forwardAt the end of the year accounts receivable has a balance of $320,000, the allowance for doubtful accounts has a debit balance of $2,300, and credit sales for the year totaled $950,000. Using the aging method, the allowance for doubtful accounts is estimated as $4,200. Prepare the adjusting entry for bad debt expense.arrow_forward
- At the end of the current year, the accounts receivable account has a debit balance of $1,191,000 and sales for the year total $13,510,000. a. The allowance account before adjustment has a debit balance of $16,100. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a debit balance of $16,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $51,500. c. The allowance account before adjustment has a credit balance of $8,600. Bad debt expense is estimated at 3/4 of 1% of sales. d. The allowance account before adjustment has a credit balance of $8,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $71,400. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. 51,450 X a. b. $ C. $ d. $ Feedbackarrow_forwardABC Co. has the following information on December 31, 20x1 before any year-end adjustments. Net credit sales 6,300,000 Accounts receivable, December 976,500 Allowance for doubtful accounts, Dec. 31 (before any necessary year-end adjustments) 53,550 Percentage of credit sales 2% The aging of receivables is shown below: Days outstanding Receivable balances % uncollectible 0 – 60 378,000 1% 61 – 120 283,500 2% Over 120 315,000 6% Total accounts receivables 976,500 Additional information: ABC Co. uses the percentage of credit sales in determining bad debts in monthly financial reports and the aging of receivables for its annual financial statements. Accounts written-off during the year amounted to ₱119,700 and accounts recovered amounted to ₱28,350. As of December 31, ABC Co. determined that ₱63,000 accounts receivable from a certain customer included in the “61-120 days outstanding” group is 95% collectible and a ₱31,500 account included in the “Over 120 days outstanding” group is…arrow_forwardDuring the current year, Giatras Electronics recorded credit sales of $710,000. Based on prior experience, it estimates a 3.0 percent bad debt rate on credit sales Required: 1. Prepare journal entries for each of the following transactions. a. On October 28 of the current year, an account receivable for $2,100 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. 2. Complete the following table, indicating the amount and effect for each transaction.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education