Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2023 balance sheet disclosed the following Current asset Receivables, set of allowance for uncollectible accounts of $32,000 5:442,000 During 2024, credit sales were $1760,000, cash collections from customers $1,840,000, and $37,000 in accounts receivable were written off. In addition, $3.200 was collected from a customer whose account was written off in 2023. An aging of accounts receivable at December 31, 2024, reveals the following Age Group 0-60 days 61-30 days 91-120 days Over 120 days Percentage of Year- End Receivables in Group 451 10 20 Percent Uscollectible 30 35 50 Required: 1. Prepare summary journal entries to account for the 2024 write-offs and the collection of the receivable previously written off 2. Prepare the year-end adjusting entry for bad debts according to each of the following situations a. Bad debt expense is estimated to be 3% of credit sales for the year. b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. c. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of accounts receivable. 3. For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2024 balance sheet?

Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2023 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $36,000 $ 462,000 During 2024, credit sales were $1,780,000, cash collections from customers $1,860,000, and $41,000 in accounts receivable were written off. In addition, $3,600 was collected from a customer whose account was written off in 2023. An aging of accounts receivable at December 31, 2024, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Percentage of Year- End Receivables in Group Percent Uncollectible 70% 20 5% 15 5 20 5 40 Over 120 days Required: 1. Prepare summary journal entries to account for the 2024 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the…

The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, theallowance account had a credit balance of $75,000. Credit sales for 2018 totaled $2,400,000 and the year-endaccounts receivable balance was $490,000. During this year, $73,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal yearends on December 31.Required:1. Does this situation describe a loss contingency? Explain.2. What is the bad debt expense that Manda Panda should report in its 2018 income statement?3. Prepare the appropriate journal entry to record the contingency.4. What is the net accounts receivable value Manda Panda should report in its 2018 balance sheet?

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