Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 9, Problem 9.5P
Cho Sportswear: Aged Schedule of Accounts Receivable
| Past Due | ||||||
| Customer | Current | 1-30 Days | 31-60 Days | 61-90 Days | Over 90 Days | Totals |
| Ryoko Design Assosciates | $100,000 | $23,800 | $ 123,800 | |||
| Marcy Fashions, Inc | 657,000 | 198,000 | $76,000 | 931,000 | ||
| Conory Clothing | $456,000 | $789,412 | 1,245,412 | |||
| Lee Womensware | 237,200 | 10,230 | 54,570 | 349,200 | 651,200 | |
| Bauer Brands, Ltd. | 100,230 | 76,770 | 41,588 | 19,000 | 237,588 | |
| Totals | $1,094,430 | $308,800 | $130,570 | $846,788 | $808,412 | $3,189,000 |
The company estimated an allowance for uncollectible accounts based on the following estimates
| Aging Category | Allowance Provided |
| Current | 5% |
| 1 -30 days past due | 9 |
| 31-60 days past due | 20 |
| 61-90 days past due | 55* |
| Over 90 days past due | 80* |
After a specific review of the company’s accounts receivable, Cho’s credit manager decided to provide a full allowance against all Bauer Brands’ balances that are more than 60 days past due. The percentage allowance is applied to the 61-90 days and over 90 days past due aging categories only after deducting the balances due from Bauer Brands.
Cho reported net credit sales of $45,000,000 for the current year. We present the company’s of accounts receivable and the allowance for uncollectible accounts:
Required
- a. Compute the balance required in the allowance for uncollectible accounts at the end of the year.
- b. Prepare the journal entry to record the bad debt provision for the current year.
- c. Independent of your answer to part (b) prepare the journal entry to record the bad debt provision for the current year assuming that the allowance for uncollectible accounts had a $331,000 debit balance.
- d. In the following year, Cho’s credit management decided to write off all accounts that were over 90 days past due. Prepare the journal entry.
- e. After the write-offs recorded in part (d), assume that Conroy Clothing pays the entire balance due. Prepare the journal entries required to record the subsequent recovery of the Conroy Clothing receivables.
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Students have asked these similar questions
Renta
Public Image, a firm specializing in marketing and publicity services, uses the balance sheet ap-
proach to estimate uncollectible accounts expensc. At year-end an aging of the accounts receiv- Aging Accounts
able produced the following classification:
PROBLEM 7.5
Receivable; Write-offs
LO 5
Not yet due
1-30 days past due
$333,000
135,000
31-60 days past due
58,500
61-90 days past due
13,500
Over 90 days past due
22,500
Total
$562,500
On the basis of past experience, the company estimated the percentages probably uncollectible
for the above five age groups to be as follows: Group I, 1%; Group 2, 3%; Group 3, 10%; Group 4,
20%; and Group 5, 50%.
The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit bal-
ance of $8,100.
Instructions
& Compute the estimated amount of uncollectible accounts based on the above classification by
age groups.
6. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper
amount.
C. Assume…
question: Record the journal entries for the bad debt expense and $50 write off from the following:
A company is getting ready to publish their annual financial statements. They have the following beginning balances:
Beginning balance for gross accounts receivable (A) $2,000
beginning balance for Allowance for doubtful accounts (XA) $300
They make $10,000 in credit sales in the current period. Assume that 1% of credit sales are typically not collectible. If the income statement method is used, what are the reported (a.) bad debt expense and (b.) ending balance for the allowance for doubtful accounts?
please include classification of accounts and label debits and credits.
Sunland Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end.
(a)
Correct answer icon
Your answer is correct.
Calculate the total estimated bad debts based on the below information.
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
Accounts receivable
200,900
77,000
45,800
38,700
22,900
$ 16,500
% uncollectible
2%
5%
6%
9%
21%
Estimated Bad debts
$ enter a dollar amount
$ enter a dollar amount
$ enter a dollar amount
$ enter a dollar amount
Chapter 9 Solutions
Intermediate Accounting
Ch. 9 - Prob. 9.1QCh. 9 - Do companies always classify cash as a current...Ch. 9 - Prob. 9.3QCh. 9 - Do accountants typically measure accounts...Ch. 9 - Under the allowance method, will the actual...Ch. 9 - How does an entity record a subsequent recovery of...Ch. 9 - Does the aging of accounts receivable method of...Ch. 9 - What is the difference between pledging accounts...Ch. 9 - How do companies account for receivables that are...Ch. 9 - Is the face value of a note receivable exchanged...
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