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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Chapter 5, Problem 5.29P
Problem 5.29
LO 5
Analysis of
| Accounts receivable | $100,000 | |
| Less: Allowance for bad debts | (14,000) | $86,000 |
The company’s accounting records revealed the following information for the year ended December 31, 2017:
| Sales (all on account) | $800,000 |
| Cash collections from customers | 820,000 |
| Accounts written off | 30,000 |
| Bad debts expense (accrued at 12/31/17) | 24,000 |
Required:
Using the information provided for 2017, calculate the net realizable value of accounts receivable at December 31, 2016, and prepare the appropriate balance sheet presentation for Carr Co., as of that point in time. (Hint: Use T-accounts to analyze the Accounts Receivable and Allowance for Bad Debts accounts. Remember that you are solving for the beginning balance of each account.)
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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…
Question 8
Al Bakara company report the following results for its calendar year December 31,2021.
Cash sales
200,000
Credit sales
180,000
Account receivable
22,000 (debit)
Account payable
46,000 (credit)
Allowances for doubtful accounts
2,000 (debit)
The company estimates bad debts to be 2% of annual total sale.
Required:
1- Prepare the adjusting entry to record the estimated bad debt.
Answer in the following format [Note: This is just an example and is not related to the question]
Jan 1 Dr. Cash..........
..120
Cr. Owner capital..............120
unts appear on Al Bal
PROBLEM 5
NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging
schedule
of
accounts receivable at
Age of Accounts
0- 30 days
31 - 60 days
61 - 90 days
91 - 120 days
Over 120 days
December 31.
below.
Amount
2016.
is
presented
P 843,200
461.000
192.400
76,650
39.400
Nine Inc.'s uncollectible accounts experience for the past 5 years are summarized in the
0 - 30
Days
0.3%
following schedule:
61 - 90
Days
12%
91 - 120
Days
38%
A/R Balance
Dec. 31
P 1,312,500
999,999
465,000
816.000
1,243,667
31 - 60
Over 120
Year
2015
Days
1.8%
Days
65%
1.6%
1.5%
2014
0.5%
11%
41%
70%
2013
69%
0.2%
0.4%
0.9%
9%
50%
47%
33%
2012
1.7%
10.2%
81%
2011
2.0%
9.7%
95%
The balance of the allowance for bad debts account at December 31, 2016. (before
adjustment) is P84,500.
Requirements:
1. What is the average bad debt expense rate for "91-120 days" accounts?
A. 76%
В. 8.6%
C. 10.38%
D. 41.80%
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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