12. APIE Company showed the following information related to the accounts receivable in order to estimate bad debts through the use of the aging. The credit period of the company is 30 days on the average. Age of Receivables Under 30 days 31-60 days 61-90 days 91-120 days 121-150 days 151-180 days Amount 4,000,000 1,500,000 1,000,000 500,000 200,000 100,000 The company based on experience has the following percent of collectibility: Accounts which are overdue for less than 30 days Accounts which are overdue 31 - 60 days Accounts which are overdue 61 - 90 days Accounts which are overdue 91 – 120 days Accounts which are overdue 121 - 150 days Accounts which are overdue for over 150 days 96% 90% 75% 55% 35% 5% What is the net realizable value of accounts receivable?

12. APIE Company showed the following information related to the accounts receivable in order to estimate bad debts through the use of the aging. The credit period of the company is 30 days on the average. Age of Receivables Under 30 days 31-60 days 61-90 days 91-120 days 121-150 days 151-180 days Amount 4,000,000 1,500,000 1,000,000 500,000 200,000 100,000 The company based on experience has the following percent of collectibility: Accounts which are overdue for less than 30 days Accounts which are overdue 31 - 60 days Accounts which are overdue 61 - 90 days Accounts which are overdue 91 – 120 days Accounts which are overdue 121 - 150 days Accounts which are overdue for over 150 days 96% 90% 75% 55% 35% 5% What is the net realizable value of accounts receivable?

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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Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,184,000 and sales for the year total $13,420,000. a. The allowance account before adjustment has a credit balance of $16,000. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a credit balance of $16,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $51,20o. c. The allowance account before adjustment has a debit balance of $9,300. Bad debt expense is estimated at 3/4 of 1% of sales. d. The allowance account before adjustment has a debit balance of $9,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $77,200. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. $ b. $ c. $ d. $
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Tammany Professional Engineers uses the Percentage of Receivables method to account for bad debt. The following is a summary of Tammany’s Accounts Receivable Aging Report. Cash Sales $42,000 Credit Sales $21,000 Allowance for Uncollectible Accounts December 31, 2020 $4,375 Current > 30 >60 >90 $115,000 $98,000 $75,000 $15,000 Estimated Uncollectible 1% 2% 4% 5% Required: Prepare the total estimate of uncollectible accounts and give the amount of the required adjustment. Do not prepare a journal entry. Please show your work if possible. In addition to submitting your answer here, you should also write it down so you an use it for the next problem.
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Twilight Company uses the aging of accounts recelvable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, (2) 31-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of recelvables of a specific age will not be paid as follows: (1) 2%, (2) 13%, and (3) 34%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $150. The total Accounts Receivable in each age category were: (1) 1-30 days old, $58,000, (2) 31-90 days old, $19,000, and (3) more than 90 days old, $3,000. Required: a. Calculate the estimate of uncollectible accounts at December 31, 2019. b. Prepare the appropriate adjusting entry dated December 31, 2019.
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