FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 10QS
Aging of receivables method P3 ^
Net Zero Products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis. (1) Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method. (2) Prepare the
Days Past Due
Total 0 1to 30 31to60 61to90 Over 90
Accounts receivable............ $115,200 $80,000 $18,000 $7,200 $4,000 $6,000
Percent uncollectible........... 1% 3% 5% 8% 11%
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Net Zero Products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis. (1) Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method. (2) Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 credit.
1)
Sustainable Supplies prepares the following aging of receivables analysis:
Accounts
receivable
Percent
uncollectible
$840.
Total
Days Past Due
Current 1 to 30
$
$
$
57,600 40,000 9,000
1%
3%
31 to 61 to Over 90
60
90
$
3,600
5%
$
2,000
8%
$
3,000
Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the
Allowance for Doubtful Accounts is a $500 credit.
11%
A) Debit Bad Debts Expense $840; credit Allowance for Doubtful Accounts
B) Debit Allowance for Doubtful Accounts $840; credit Bad Debts Expense $840.
C) Debit Bad Debts Expense $1,840; credit Allowance for Doubtful Accounts $1,840.
D) Debit Allowance for Doubtful Accounts $1,840; credit Bad Debts Expense $1,840.
E) Debit Bad Debts Expense $1,340; credit Allowance for Doubtful Accounts $1,340.
Question Content Area
Estimating Allowance for Doubtful Accounts
Kirchhoff Industries has a past history of uncollectible accounts, as shown below.
Age Class
PercentUncollectible
Not past due
1%
1-30 days past due
5
31-60 days past due
25
61-90 days past due
35
Over 90 days past due
50
Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.
Kirchhoff IndustriesAging of Receivables Scheduleblank
Customer
Balance
Not PastDue
1-30 DaysPast Due
31-60 DaysPast Due
61-90 DaysPast Due
Over 90 DaysPast Due
Subtotals
840,000
495,600
184,800
75,600
42,000
42,000
Conover Industries
18,100
18,100
Keystone Company
18,200
18,200
Moxie Creek Inc.
6,600
6,600
Rainbow Company
10,000
10,000
Swanson Company
23,100
23,100
Total receivables
916,000
518,700
194,800
82,200
60,200
60,100
Percentage uncollectible
1%
5%
25%
35%
50%
Allowance for Doubtful…
Chapter 9 Solutions
FUND.ACCT.PRIN.
Ch. 9 - Credit card sales Prepare journal entries for the...Ch. 9 - Direct write-off method P1 Solstice Company...Ch. 9 - Recovering a bad debt P1 Solstice Company...Ch. 9 - Distinguishing between allowance method and direct...Ch. 9 - Prob. 5QSCh. 9 - Allowance method for bad debts P2 Gomez Corp. uses...Ch. 9 - Reporting allowance for doubtful accounts P2 On...Ch. 9 - Prob. 8QSCh. 9 - Prob. 9QSCh. 9 - Aging of receivables method P3 ^ Net Zero...
Ch. 9 - Prob. 11QSCh. 9 - Prob. 12QSCh. 9 - Prob. 13QSCh. 9 - Prob. 14QSCh. 9 - Prob. 15QSCh. 9 - Prob. 16QSCh. 9 - Prob. 17QSCh. 9 - Prob. 18QSCh. 9 - Prob. 19QSCh. 9 - Prob. 20QSCh. 9 - Prob. 21QSCh. 9 - Exercise 9-1
Accounts receivable subsidiary...Ch. 9 - Prob. 2ECh. 9 - Exercise 9-3
Sales on store credit card
C1
Z-Mart...Ch. 9 - Exercise 9-4
Direct write-off method
Dexter...Ch. 9 - Exercise 9-5 Writing off receivables P2
On January...Ch. 9 - Exercise 9-6 Percent of sales method; write-off...Ch. 9 - Exercise 9-7 Percent of accounts receivable...Ch. 9 - Exercise 9-8 Aging of receivables method P3
Daley...Ch. 9 - Exercise 9-9 Percent of receivables method...Ch. 9 - Exercise 9-10 Aging of receivables schedule...Ch. 9 - Exercise 9-10
Estimating bad debts
P3
At December...Ch. 9 - Exercise 9-11
Notes receivable...Ch. 9 - Exercise 9-12
Notes receivable transactions...Ch. 9 - Exercise 9-14 Honoring a note P4
Prepare journal...Ch. 9 - Exercise 9-15 Dishonoring a note P4
Prepare...Ch. 9 - Exercise 9-16 Selling and pledging accounts...Ch. 9 - Exercise 9-17 Accounts receivable turnover A1 Q...Ch. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Prob. 21ECh. 9 - Prob. 22ECh. 9 - Prob. 23ECh. 9 - Problem 9-1A Sales on account and credit card...Ch. 9 - Problem 9-2A Estimating and reporting bad debts P2...Ch. 9 - Problem 9-3A Aging accounts receivable and...Ch. 9 - Problem 9-4A Accounts receivable transactions and...Ch. 9 - Problem 9-5A Analyzing and journalizing notes...Ch. 9 - Problem 9-1B Sales on account and credit card...Ch. 9 - Problem 9-2B Estimating and reporting bad debts P2...Ch. 9 - Problem 9-3B Aging accounts receivable and...Ch. 9 - Problem 9-4B Accounts receivable transactions and...Ch. 9 - Prob. 5PSBCh. 9 - SP 9 Santana Rey: owner of Business Solutions,...Ch. 9 - Prob. 1GLPCh. 9 - Prob. 1AACh. 9 - Prob. 2AACh. 9 - Prob. 3AACh. 9 - Prob. 1DQCh. 9 - Why does the direct write-off method of accounting...Ch. 9 - Prob. 3DQCh. 9 - Why might a business prefer a note receivable to...Ch. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Anton Blair is the manager of a medium-size...Ch. 9 - Prob. 2BTNCh. 9 - Prob. 3BTNCh. 9 - Prob. 4BTNCh. 9 - 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
- Aging Method Bad Debt Expense Cindy Bagnal, the manager of Cayce Printing Service, has provided the following aging schedule for Cayces accounts receivable Cindy indicates that the $121,100 of accounts receivable identified in the table does not include $4,600 of receivables that should be written off. Required: 1. Journalize the $4,600 write-off. 2. Determine the desired post adjustment balance in allowance for doubtful accounts (round each aging category to the nearest dollar). 3. If the balance in allowance for doubtful accounts before the $4,600 write-off was a debit of $700, compute bad debt expense. Prepare the adjusting entry to record bad debt expense.arrow_forwardAging Method Bad Debt Expense Carol Simon, the manager of Handy Plumbing has provided the following aging schedule for Handys accounts receivable: Carol indicates that the $125,200 of accounts receivable identified in the table does not include $9,400 of receivables that should be written off. Required: 1. Journalize the $9,400 write-off. 2. Determine the desired post adjustment balance in allowance for doubtful accounts. 3. If the balance in allowance for doubtful accounts before the $9,400 write-off was a debit of $550, compute bad debt expense. Prepare the adjusting entry to record bad debt expense.arrow_forwardEstimating Allowance for Doubtful Accounts Kirchhoff Industries has a past history of uncollectible accounts, as follows. Age Class PercentUncollectible Not past due 2% 1-30 days past due 4 31-60 days past due 18 61-90 days past due 40 Over 90 days past due 75 Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below. Kirchhoff Industries Estimate the Allowance for Doubtful Accounts Balance Not PastDue Days PastDue 1-30 Days PastDue 31-60 Days PastDue 61-90 Days PastDue Over 90 Subtotals $1,050,000 $600,000 $220,000 $115,000 $85,000 $30,000 Conover Industries 30,000 30,000 Keystone Company 18,000 18,000 Moxie Creek Inc. 9,000 9,000 Rainbow Company 26,400 26,400 Swanson Company 46,600 46,600 Total receivables 1,180,000 626,400 266,600 124,000 103,000 60,000 Percentage uncollectible 2% 4% 18% 40% 75%…arrow_forward
- Required information [The following information applies to the questions displayed below.] Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due Total $570,000 1 to 30 $90,000 Over 90 $30,000 10% 31 to 60 61 to 90 Accounts receivable $396,000 $36,000 $18,000 7% 1% 2 % 5% Percent uncollectible a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4.5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 debit. Complete this question by entering your answers in the tabs below.arrow_forwardPleasearrow_forwardAn aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $5,249. If Allowance for Doubtful Accounts has a $1,383 credit balance, the adjustment to record the bad debt expense for the period will require a Oa. debit to Bad Debt Expense for $3,866. Ob. credit to Allowance for Doubtful Accounts for $5,249. Oc. debit to Bad Debt Expense for $1.383. Od. debit to Bad Debt Expense for $5,249. Dasarrow_forward
- Current Attempt in Progre Pina SA reports the following financial information before adjustments. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue No. Account Titles and Explanation. Dr. (b) €130,100 Cr. Prepare the journal entry to record bad debt expense assuming Pina estimates bad debts at (a) 4% of accounts receivable assuming Allowance for Doubtful Accounts has the balance given in the problem data, and (b) 4% of accounts receivable assuming Allowance for Doubtful Accounts has a €1,490 debit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) €3,310 808,500 Debit Creditarrow_forwardComputing Bad Debt Expense Using Aging of Accounts Receivable Method Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The Description Computing Bad Debt Expense Using Aging of Accounts Receivable Method Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1–30 days old, $12,000; (2) 31–90 days old, $5,000; and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average loss rate on the amount of the receivable due to uncollectibility is (1) 3 percent, (2) 15 percent, and (3) 30 percent, respectively. At December 31, 2010 (end of the current year), the Allowance for Doubtful Accounts balance was $800 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 2. What amount should be recorded as Bad…arrow_forwardEstimating Allowance for Doubtful Accounts Kirchhoff Industries has a past history of uncollectible accounts, as shown below. Age Class Percent Uncollectible Not past due 2% 1-30 days past due 6 31-60 days past due 20 61-90 days past due 30 Over 90 days past due 45 Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below. Kirchhoff Industries Aging of Receivables Schedule Customer Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Subtotals 606,700 358,000 133,500 54,600 30,300 30,300 Conover Industries 19,700 19,700 Keystone Company 17,900 17,900 Moxie Creek Inc. 7,400 7,400 Rainbow Company 10,600 10,600 Swanson Company 24,600 24,600 Totals 686,900 382,600 144,100 62,000 48,200 50,000 Percentage uncollectible 2% 6% 20% 30% 45% Allowance for Doubtful Accounts fill in the blank 1 fill in the blank 2…arrow_forward
- DOUBTFUL ACCOUNTS B-AGING ANALYSIS HUGZ COMPANY uses the aging analysis in determining its doubtful accounts. Accounts receivable shows a balance of P203,470 as of December 31, 2021 before adjustment. Analysis of the accounts revealed the following: Accounts Receivable Estimated Loss Rate Estimated Loss Age of Accounts Not yet due P 54,600 1% 75,900 1-30 days due 3% 6% 10% 15,750 31-60 days due 31,820 61-90 days due 16,900 91-120 days due 8,500 Over 120 days due 203,470 20% 50% P REQUIRED: Complete the table and prepare the adjusting entry to record the doubtful accounts expense under each of the following unrelated cases: Case 1: Allowance for doubtful accounts has a balance of P10,000 before adjustment. Case 2: Assume that the company has a zero balance in the allowance for doubtful account during the first year operations.arrow_forwardSelect the best answer for the question 12. What account will be debited to record an accounts receivable amount considered to be a bad debt if the direct write-off method of accounting is used? O A. Cash OB. Allowance for Doubtful Accounts OC. Sales OD. Uncollectible Accounts Expense Mark for review (Will be highlighted on the review page) revious Questio Next Question >> Jmarrow_forwardA partially completed aging of receivables schedule for Lindy Designs follows: a. Determine the amount estimated to be uncollectible by completing the aging of receivables schedule. Round calculations to the nearest dollar. Age Interval Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due 181-365 days past due Over 365 days past due Total Date Balance Account $550,000 96,500 43,750 22,250 5,600 3,100 1,250 $722,450 Estimate of Uncollectible Accounts Percentage 2.50% 4.00% 9.50% 16.00% 31.00% 60.00% 95.00% Estimate of Uncollectible Accounts Amount $ 13,750 3,860 4,157 3,560 1,736 1,860 1,188 b. If Allowance for Doubtful Accounts has a credit balance of $9,700, journalize the adjusting entry for the bad debt expense for the year. If an amount box does not require an entry, leave it blank. Debit Credit 30,111arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License