1. How much is the adjusted balance of the allowance for doubtful accounts as of December 31, 2005?2. The necessary adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2005 would include: Don't Let Me Down, Inc. estimates its doubtful accounts by aging its accounts receivable.The aging schedule of accounts receivable at December 31, 2005 is presented below:AmountP1,264,800691,500Age of accounts0 - 30 days31-60 days61-90 days91 - 120 daysover 120 days288,600114,97559,100P2,418,975Don't Let Me Down, Inc.'s uncollectible accounts experience for the past 5 years aresummarized in the following schedule: 0 - 3031-6061-9091 - 120Over120YearA/R BalanceDec. 31P1,968,750DaysDaysDaysDaysDays20040.3%1.8%12%38%65%20031,500,0000.5%1.6%11%41%70%2002697,5000.2%1.5%9%50%69%20011,224,0000.4%1.7%10.2%47%81%20001,865,5000.9%2.0%9.7%33%95%The balance of the allowance for doubtful accounts at December 31, 2005 (beforeadjustment) is P126,750.

Accounts receivable means accounts of those customers to whom business has made credit sales on…

1. How much is the adjusted balance of the allowance for doubtful accounts as of December 31, 2005? 2. The necessary adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2005 would include:

1. How much is the adjusted balance of the allowance for doubtful accounts as of December 31, 2005? 2. The necessary adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2005 would include:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. How much is the adjusted balance of the allowance for doubtful accounts as of December 31, 2005?

2. The necessary adjusting journal entry to adjust the allowance for doubtful accounts as of December 31, 2005 would include:

Don't Let Me Down, Inc. estimates its doubtful accounts by aging its accounts receivable.
The aging schedule of accounts receivable at December 31, 2005 is presented below:
Amount
P1,264,800
691,500
Age of accounts
0 - 30 days
31-60 days
61-90 days
91 - 120 days
over 120 days
288,600
114,975
59,100
P2,418,975
Don't Let Me Down, Inc.'s uncollectible accounts experience for the past 5 years are
summarized in the following schedule:

0 - 30
31-60
61-90
91 - 120
Over120
Year
A/R Balance
Dec. 31
P1,968,750
Days
Days
Days
Days
Days
2004
0.3%
1.8%
12%
38%
65%
2003
1,500,000
0.5%
1.6%
11%
41%
70%
2002
697,500
0.2%
1.5%
9%
50%
69%
2001
1,224,000
0.4%
1.7%
10.2%
47%
81%
2000
1,865,500
0.9%
2.0%
9.7%
33%
95%
The balance of the allowance for doubtful accounts at December 31, 2005 (before
adjustment) is P126,750.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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