Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.16BE
To determine
Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible
Accounts receivable:
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
To determine: The amount of beginning year balance in accounts receivable.
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b. 8,275,000
c. 7,725,000
d. 7,875,000
PART III. PROBILEM SOLVING. Answer what is being asked. Please show your solutions.
1. Easy Company sells directly to retail customers. On January 1, 2020, the balance of the
accounts receivable was P2,070,000 while the allowance for doubtful accounts was a credit
of P78,000. The following data are gathered.
Credit Sales
Writeoffs
Recoveries
22,000
2017
11,100,000
12,250,000)
260,000
295,000
300,000
2018
37,000
36,000
2019
14,650,000
15,000,000
2020
310,000
42,000
Doubtful accounts are provided for as a percentage of credit sales. The entity calculated
the percentage annually by using the experience of the three years prior to the current year.
Required:
a. What is the percentage of credit sales to be used in computing doubtful accounts
expense for 2020?
b. What amount should be reported as doubtful expense for 2020?
c. What amount should be reported as allowance for doubtful accounts on December 31,
2020?
CS
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Kimmel, Financial Accounting, 8e
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Practice Question 40
Which one of the following is the correct presentation of Accounts Receivable and its contra account on the balance sheet?
Accounts Receivable
$642,000
Less: Bad Debt Expense
(17,000)
(2,000)
Less: Allowance for Doubtful Accounts
$623,000
Accounts Receivable
$642,000
Less: Allowance for Doubtful Accounts
(2,000)
$640,000
Accounts Receivable
$642,000
Plus: Allowance for Doubtful Accounts
2,000
$644,000
Accounts Receivable
$642,000
Less: Bad Debt Expense
(17,000)
$625,000
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Exercise 7-16 (Static) Uncollectible accounts; allowance method; balance sheet approach; financial
statement effects [LO7-5, 7-6]
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2024, accounts receivable totaled $625,000. The
allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of
$32,000 at the beginning of 2024 and $21,000 in receivables were written off during the year as uncollectible. Also, $1,200 in cash
was received in December from a customer whose account previously had been written off. The company estimates bad debts by
applying a percentage of 10% to accounts receivable at the end of the year.
Required:
1. Prepare journal entries to record the write-off of receivables, the collection of $1,200 for previously written off receivables, and
the year-end adjusting entry for bad debt expense.
2. How would accounts receivable be shown in the 2024 year-end balance sheet?…
Chapter 7 Solutions
Intermediate Accounting, 10 Ed
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
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