Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2020 92,000 Allowance for uncollectible accounts at December 31, 2020 1,850 Debit Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: Prepare the adjusting entry to record uncollectible account expense on December 31, 2020. Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared. Show how the receivables would be reported on the December 31, 2020 balance sheet for Seed Enterprise.
Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2020 92,000 Allowance for uncollectible accounts at December 31, 2020 1,850 Debit Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: Prepare the adjusting entry to record uncollectible account expense on December 31, 2020. Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared. Show how the receivables would be reported on the December 31, 2020 balance sheet for Seed Enterprise.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 5SEA: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current...
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PROBLEM 3 (MODIFIED) Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments:
|
Net credit sales for the year |
Php 680,000 |
|
|
|
92,000 |
|
|
Allowance for uncollectible accounts at December 31, 2020 |
1,850 |
Debit |
Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales.
REQUIRED:
- Prepare the
adjusting entry to record uncollectible account expense on December 31, 2020. - Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared.
- Show how the receivables would be reported on the December 31, 2020
balance sheet for Seed Enterprise.
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