FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Concept explainers
Question
Seaforth International wrote off the following
|
Customer |
Amount |
|
Kim Abel |
$ 24,300 |
|
Lee Drake |
31,195 |
|
Jenny Green |
29,715 |
|
Mike Lamb |
17,890 |
|
Total |
$103,100 |
The company prepared the following aging schedule for its accounts receivable on December 31:
|
Aging Class (Number of Days Past Due) |
Receivables Balance on December 31 |
Estimated Percent of Uncollectible Accounts |
|
0–30 days |
$ 735,000 |
1% |
|
31–60 days |
290,000 |
2 |
|
61–90 days |
111,000 |
15 |
|
91–120 days |
70,000 |
30 |
|
More than 120 days |
94,000 |
60 |
|
Total receivables |
$1,300,000 |
|
A. |
Journalize the write-offs under the direct write-off method. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles. |
|
B. |
Journalize the write-offs and the year-end |
|
C. |
How much higher (lower) would Seaforth International’s net income have been under the allowance method than under the direct write-off method? |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A summary of Milan Fashion's December 31, 2021, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: Age Group Amount % 0-60 days $40,000 0.5 61-90 days 15,000 1.5 91-120 days 2,000 15.0 Over 120 days 800 80.0 The allowance for uncollectible accounts had a credit balance of $1,600 at January 1, 2021. During the year bad debts of $1,150 were written off. Also, $150 previously written off were paid by a customer. Required: Prepare all 2021 journal entries with respect to bad debts and the allowance for uncollectible accounts. Show computations. Prepare a T account for the allowance for uncollectible accounts from 1/1 to 12/31/21.arrow_forwardPrepare an aging schedule to determine the total estimated uncollectibles at March 31,2018arrow_forwardEstimating Uncollectible Accounts and Reporting Accounts Receivable LaFond Company analyzes its accounts receivable at December 31, and arrives at the age categories below along with the percentages that are estimated as uncollectible. Accounts Estimated Receivable Loss % $ 90,000 20,000 11,000 6,000 Over 180 days past due 4,000 Total accounts receivable $ 131,000 Age Group 0-30 days past due 31-60 days past due 61-120 days past due 121-180 296 4 The balance of the allowance for uncollectible accounts is $520 on December 31, before any adjustments. Transaction Record bad debts expense 5 10 25 (a) What amount of bad debts expense will LaFond report in its income statement for the year? $0 Cash Asset (b) Use the financial statement effects template to record LaFond's bad debts expense for the year. Use negative signs with your answers, when appropriate. Noncash Assets Balance Sheet Liabilities Contributed Capital (c) What is the balance of accounts receivable on it December 31 balance…arrow_forward
- Maple Leafs Construction has the following data for the year ended December 31, Year 1: Accounts receivable (January 1, Year 1) $455,000 Credit sales 900,000 Collections from credit customers 825,000 Customer accounts written off as uncollected 15,000 Allowance for doubtful accounts (after write-off of uncollected accounts) 2,100 Estimated uncollected accounts based on an aging 29,200 analysis (December 31, Year 1) Refer to Maple Leafs Construction. What is the balance of accounts receivable at December 31, Year 1? O $455,000 O $511,900 O $515,000 O $440,000arrow_forwardVishalarrow_forwardSipacore Ltd. has an Accounts Receivable amount of $363,700 and an unadjusted credit balance in Allowance for Expected Credit Losses of $8,600 at March 31. The company's accounts receivable and percentage estimates of uncollectible accounts are as follows: Number of Days Outstanding 0-30 (a) 31-60 61-90 Over 90 Total Your answer is correct. Age of Accounts 0-30 days 31-60 days Accounts Receivable $258,000 45,800 32,600 27,300 $363,700 61-90 days Over 90 days Prepare an aging schedule to determine the total estimated uncollectibles at March 31. Amount % $258,000 2% 45,800 10% 32,600 30% Estimated Percentage Uncollectible 27,300 50% 2% 10% 30% 50% Estimated Uncollectible 5160 4580 9780 13650 33170arrow_forward
- Wohoo Publishers uses the allowance method to estimate uncollectible accounts receivables. The company produced the following aging of the accounts receivable at year-end (Y in thousands). Accounts receivable % uncollectible Estimated bad debts Total 200,000 0-30 days 77,000 2% 31-60 days 46,000 5% 61-90 days 91-120 days 39,000 6% 23,000 10% Over 120 days 15,000 25%arrow_forwardDaley Company prepared the following aging of receivables analysis at December 31. Total Days Past Due 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 575,000 $ 397,000 $ 91,000 $ 37,000 $ 19,000 $ 31,000 Percent uncollectible 2% 3% 6% 8% 11% Complete the table below to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $3,700 credit. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $200 debit. Complete the table below to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. Accounts Receivable x Percent Uncollectible (%) = Estimated…arrow_forwardThe accounts receivable clerk for Evers Industries prepared the following partially completed aging of receivables schedule as of the end of business on July 31: 1 A B C D E F G 2 Days Past Due Days Past Due Days Past Due Days Past Due 3 Customer Balance Not Past Due 1-30 31-60 61-90 Over 90 4 Acme Industries Inc. 3,000.00 3,000.00 5 Alliance Company 4,600.00 4,600.00 6 ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ 7 Zollinger Company 4,900.00 4,900.00 8 Subtotals 1,052,200.00 602,500.00 219,400.00 114,100.00 85,800.00 30,400.00 The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals: Customer Balance Due Date Boyd Industries $44,000 April 7 Hodges Company 21,200 May 29 Kent Creek Inc. 7,300 June 8 Lockwood…arrow_forward
- At the end of the first year of operations, mayberry advertising had accounts receivable of $21100. Management of the company estimates that 8% of the accounts will not be collected What adjutment would mayberry advertising record to established allowance for uncollectible accounts Do the journal entry worksheetarrow_forwardOn April 1, ABC has an Accounts Receivable balance of $190,000. During the month, credit sales total $210,000. As a result of collections efforts, the aging of Accounts Receivable is as follows for April 30: Current $100,000 (1% is estimated to be uncollectible) 0-30 Days Past Due $50,000 (5% is estimated to be uncollectible) 31-60 Days Past Due $ 20,000 (10% is estimated to be uncollectible) 31-90 Days Past Due $10,000 (20% is estimated to be uncollectible) > 90 Days Past Due $20,000 (50% is estimated to be uncollectible) Balance in Allowance for Doubtful Accounts (prior to any April 30 entry) $5,000 Credit If ABC is using the % of sales method of estimating its bad debts, what is the journal entry made at the end of the month if the estimated % of sales that are uncollectible is 4% ?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
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:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education