Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 13, Problem 8QS
Summary Introduction
Concept Introduction:
Prior period adjustments are adjustments made in the current year’s financial statement for the accounting errors made in the prior accounting years. Prior period items are shown as a separate line item in the income statement and also disclosed in the notes to the financial statement.
To discuss: the reporting of the prior period adjustment in the current year’s financial statement.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
identify whether it is treated as a prior period adjustment or change in accounting estimate. A review of notes payable discovers that three years ago the company reported the entire amount of a payment (principal and interest) on an installment note payable as interest expense. This mistake had a material effect on net income in that year.
At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Harmon, Inc. uses the aging of receivables method to account for the allowance of doubtful accounts and
the recording of bad debt expense. Below is the aging of the accounts receivable along with the associated
estimation of uncollectibility.
a. Calculate the amount estimated to be uncollectible at the end of 2021.
b. Record the year-end entry to record the bad debt expense if there was a credit balance of $12,000 in
the Allowance for Doubtful Accounts at the end of 2021 before the year-end entry.
c. Record the year-end entry to record the bad debt expense if there was a debit balance of $3,500 in
the Allowance for Doubtful Accounts at the end of 2021 before the year-end entry.
Harmon, Inc - Accounts Receivable Aging Balances - December 31, 2021
Total
1-30 Days
31-60 Days
61-90 Days
91-120 Days…
Chapter 13 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 13 - Explain the difference between financial reporting...Ch. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Prob. 17DQCh. 13 - Prob. 1QSCh. 13 - Prob. 2QSCh. 13 - Prob. 3QSCh. 13 - Prob. 4QSCh. 13 - Prob. 5QSCh. 13 - Prob. 6QSCh. 13 - Prob. 7QSCh. 13 - Prob. 8QSCh. 13 - Which of the following gains or losses would...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - Prob. 10ECh. 13 - Prob. 12ECh. 13 - Prob. 13ECh. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 1PSACh. 13 - Prob. 2PSACh. 13 - Prob. 3PSACh. 13 - Prob. 5PSACh. 13 - Prob. 6PSACh. 13 - Selected comparative financial statements of...Ch. 13 - Prob. 2PSBCh. 13 - Prob. 3PSBCh. 13 - Prob. 5PSBCh. 13 - Prob. 6PSBCh. 13 - Prob. 13SPCh. 13 - Prob. 2FSACh. 13 - Prob. 3FSACh. 13 - Prob. 1BTNCh. 13 - Prob. 5BTN
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
- At the end of the current year, using the aging of receivable method, management estimated that $24,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $465. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?arrow_forwardOne company has a debit balance of $11325 in its allowance for doubtful accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year, One company estimates that $1452 of its receivables are uncollectible. As a result it will debit Bad Debts Expense for what amount?arrow_forwardAt 31 December 20X8, Small Ltd. reported gross accounts receivable of $2,481,800. Investigation showed the following: The credit balance in the allowance for doubtful accounts was $182,400 after write-offs for the year but before any bad debt adjustment. Bad debt expense is based on a percentage of receivables. Based on the latest available facts, $280,000 will not be collected due to collection issues. Terms of 1/10, n/30 were granted to all customers. Accounts receivable were recorded gross, and the discounts taken were recorded when taken by the customers in a discounts account, reported contra to the sales account. Estimated discounts inherent in the closing accounts receivable balance were $30,600. The allowance for sales discounts account was established at $29,800 last year and has not been adjusted since. Prepare year-end adjusting entries with respect to accounts receivable. Show how the net accounts receivable would appear on the statement of financial position on 31…arrow_forward
- Pichai Party Supplies reported an allowance for doubtful accounts of $24,000 at the beginning of the fiscal year and $32,000 at the end of the fiscal year. During the year, the company recognized bad debt expense of $30,000. What amount did the company record as accounts receivables write-offs during the year? $30,000. $22,000. None of the answers are correct. $32,000. $24,000.arrow_forwardHelix reported the following information in its financial statements. Write-offs of accounts receivable were $340 in the current year. Helix did not recover any write-offs. At December 31 Current Year Prior Year Accounts receivable $ 7,800 $ 5,400 Allowance for doubtful accounts 680 490 Accounts receivable, net $ 7,120 $ 4,910 Determine Bad Debts Expense for the current year.arrow_forwardOn December 31 of the current year, the following accounts were discovered in the BT21 Company's ledger: Dr. Accounts Receivable is at P356,800; Cr. Bad Debt Allowance is for P8,760; Cr. Cash Sales is worth P913,800; and Cr. Credit Sales is worth P1,851,000. Five percent of the outstanding accounts receivable, according to analysis, won't be recovered. What amount of the allowance for bad debts will need to be adjusted on December 31?arrow_forward
- During the current year, Sun Electronics, Incorporated, recorded credit sales of $760,000. Based on prior experience, it estimates a 1 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $430 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. Required: Indicate the effects of the transactions in the following table. Indicate the accounts affected and enter decreases to account categories with a minus sign. Transaction a. a. b. b. Assets Liabilities Stockholders' Equityarrow_forwardAssume the aging of accounts receivable method was used by the company and that $7050 of the accounts receivable as of Dec 31 were estimated to be uncollectible. You are now required to: a) Determine the amount to be charged to uncollectible expense( show your workings for the computation of this figure).arrow_forwardSteering Corporation reported the following selected information in its general ledger at December 31: All sales were on account. Some accounts receivable were collected. One account was written off; there were no subsequent recoveries. At the end of the year, uncollectible accounts were estimated to total $1,980. Using your knowledge of receivables transactions, determine the missing amounts. (Hint: You may not be able to solve the below items in alphabetical order. In addition, you may find it helpful to reconstruct the journal entries.) Beg. bal. End, bal. (a) U (f) Accounts Receivable 17,800 Allowance for Doubtful Accounts Beg. bal. 900 Unadj. bal. End. bal. Sales Bad Debts Expense (b) (d) (e) 54,900 1,800 900 77,200arrow_forward
- Helix reported the following information in its financial statements. Write-offs of accounts receivable were $340 in the current year. Helix did not recover any write-offs. At December 31 Accounts receivable Allowance for doubtful accounts Accounts receivable, net Current Year $ 7,800 680 $ 7,120 Determine Bad Debts Expense for the current year. Bad debts expense Prior Year $ 5,400 490 $ 4,910arrow_forwardAn aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $3,787. If Allowance for Doubtful Accounts has a $847 debit balance, the adjustment to record the bad debt expense for the period will require a:arrow_forwardTimmons Company had a January 1 credit balance in its Allowance for Doubtful Accounts of $7,000 for the current year. The following transactions and events affected the Allowance for Doubtful Accounts during the current year: Apr. 15 Bard’s account receivable of $5,700 was deemed un-collectable. July 1 Drake paid the full amount of a previously written-off account receivable. This receivable of $2,300 had been written off in the prior year. Dec. 31 Bad debts expense of $7,500 was recorded. What amount should appear in the allowance for doubtful accounts in the December 31 balance sheet for the current year?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License