Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 5, Problem 5.12E
Exercise 5.12
LO 5
Required:
- What was the total amount of bad debts expense recognized during the year? (Hint: Make a T-account for the Allowance for Bad Debts account.)
- As a result of a comprehensive analysis, it is determined that the December 31, 2016, balance of Allowance for Bad Debts should be $23,200. Show in the horizontal model or in
journal entry format the adjustment required.
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Problem 4
Part A. On 12/31/16, Phoebe Company’s balance sheet revealed a $7,000 balance in its allowance for doubtful accounts. During 2017, $2,000 of accounts were written off and $500 of accounts receivable previously written off were collected. On 12/31/17, bad debt expense was estimated to be 5% on net credit sales, which were $400,000
Required: Calculate the balance in the allowance for doubtful accounts on 12/31/17.
Part B. The following information was taken from the unadjusted trial balance and aging schedule of Diane Company on December 31, 2017. All sales are on account.
Accounts and related balances at December 31, 2017 before adjustment:
Debit
Credit
Accounts receivable
$46,000
Allowance for doubtful accounts
$ 680
Sales (all on account)
500,000
Sales returns
3,000
Aging Schedule of Accounts Receivable:
Age
Amount
% Uncollectible
0-30 days
$14,000
5%
30-60…
Exercise 8-5
Waterway Industries has accounts receivable of $98,600 at March 31, 2017. Credit terms are 2/10, n/30. At March 31, 2017, there is a $2,227 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below.
Balance, March 31
Estimated PercentageUncollectible
Age of Accounts
2017
2016
Current
$68,400
$69,990
2
%
1–30 days past due
13,700
7,880
5
31–90 days past due
9,700
2,400
28
Over 90 days past due
6,800
1,100
49
$98,600
$81,370
Determine the total estimated uncollectibles.
The total estimated uncollectibles
$
Prepare the adjusting entry at March 31, 2017, to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
PROBLEM 2
Fleming Sign Company uses the allowance method in accounting for uncollectible accounts. Past
experience indicates that 6% of accounts receivable will eventually be uncollectible. Selected
account balances at December 31, 2017, and December 31, 2018, appear below:
12/31/17
12/31/18
Net Credit Sales
$400,000
$500,000
Accounts Receivable
60,000
80,000
Allowance for Doubtful Accounts
5,200
?
Instructions
(a) Record the following events in 2018.
Aug. 10
Determined that the account of Sue King for $800 is uncollectible.
Sept. 12
Determined that the account of Tom Young for $3,700 is uncollectible.
Oct. 10
Received a check for $500 as payment on account from Sue King, whose
account had previously been written off as uncollectible. She indicated the
remainder of her account would be paid in November.
Nov. 15
Received a check for $300 from Sue King as payment on her account.
(b) Prepare the adjusting journal entry to record the bad debt provision for the year ended
December 31, 2018.…
Chapter 5 Solutions
Accounting: What the Numbers Mean
Ch. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Mini-Exercise 5.3 LO 5 Accounts receivable, bad...Ch. 5 - Mini-Exercise 5.4 LO 5 Bad debts...Ch. 5 - Mini-Exercise 5.5 LO 7, 8 Cost flow...Ch. 5 - Mini-Exercise 5.6 LO 7, 8 Cost flow...Ch. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10E
Ch. 5 - Exercise 5.11 LO 5 Bad debts analysis-Allowance,...Ch. 5 - Exercise 5.12 LO 5 Bad debts analysis-Allowance...Ch. 5 - Exercise 5.13 LO 5 Cash discounts-ROI Annual...Ch. 5 - Prob. 5.14ECh. 5 - Exercise 5.15 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.16 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.17 LO 7, 8 LIFO versus FIFO-matching...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Prob. 5.20ECh. 5 - Exercise 5.21 LO 5, 6, 8 Transaction...Ch. 5 - Exercise 5.22 LO 5. 8, 10 Transaction...Ch. 5 - Exercise 5.23 LO 5, 6, 7 Transaction...Ch. 5 - Exercise 5.24 LO 7, 8, 10 Transaction...Ch. 5 - Prob. 5.25PCh. 5 - Prob. 5.26PCh. 5 - Problem 5.27 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.28 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.29 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.30 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.31 LO 7, 8 Cost flow assumptions-FIFO...Ch. 5 - Problem 5.32 LO 7, 8 Cost flow assumptions-FIFO,...Ch. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Problem 5.35 LO 7 Effects of inventory errors If...Ch. 5 - Prob. 5.36PCh. 5 - Case 5.37 LO 5, 7, 8 Focus company-accounts...Ch. 5 - Case 5.38
LO 5, 7
Comparative analysis of current...
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