14. On December 31, 2021, Andy Inc. has a debit balance of $1,500 for the Allowance for Uncollectible Accounts before any year-end adjustment. Andy Inc. also has the followin information for its accounts receivable and the estimated percentages of bad debts for different past-due amounts: A. B. C. D. Age Group (days past due) 0-30 31-60 61-90 $6,500. $1,500. $5,000. $8,000. Accounts Receivable $50,000 $20,000 $10,000 Estimated Percent What is the amount of bad debt expense to be reported on Andy Inc.'s financial statements for 2021 using the aging method? Uncollectible 5% 10% 20%

14. On December 31, 2021, Andy Inc. has a debit balance of $1,500 for the Allowance for Uncollectible Accounts before any year-end adjustment. Andy Inc. also has the followin information for its accounts receivable and the estimated percentages of bad debts for different past-due amounts: A. B. C. D. Age Group (days past due) 0-30 31-60 61-90 $6,500. $1,500. $5,000. $8,000. Accounts Receivable $50,000 $20,000 $10,000 Estimated Percent What is the amount of bad debt expense to be reported on Andy Inc.'s financial statements for 2021 using the aging method? Uncollectible 5% 10% 20%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 7RE: McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made...

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Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.
Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton Corporations accounting records at the beginning of 2019: During 2019, sales on credit amounted to 575,000, 557,400 was collected on outstanding receivables and 2,600 of receivables were written off as uncollectible. On December 31, 2019, Shell on estimastes its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Sheltons estimate of bad debt expense for 2019. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2019, balance sheet. 3. Compute Shelton's receivables turnover. (Round to one decimal place.) 4. It Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
Receivables Issues Magrath Company has an operating cycle of less than one year and provides credit terms for all of its customers. On April 3, 2019, the company factored, without recourse, some of its accounts receivable. Magrath does not normally factor its receivables. On August 1, 2019, Magrath sold special order merchandise and received an interest-bearing note due April 30, 2020. Magrath uses the allowance method to account for uncollectible accounts. During 2019, some accounts were written off as uncollectible, and other accounts previously written off as uncollectible were collected. Required: 1. Explain how Magrath should account for and report the accounts receivable factored on April 3, 2019. Why is this accounting treatment appropriate? 2. Explain how Magrath should report the effects of the interest-bearing note on its income statement for the year ended December 31, 2019, and its December 31, 2019, balance sheet. 3. Explain how Magrath should account for the collection of the accounts previously written off as uncollectible. 4. What are the two basic approaches to estimating uncollectible accounts under the allowance method? What is the rationale for each approach?
McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of 1,500,000 in 2019. McKinney estimates 2.5% of its sales will be uncollectible. Prepare the journal entry to record bad debt expense for McKinney at the end of 2019.
Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000
no work shown required
On December 31, 2019, the end of X Company's accounting period, the company has outstanding Accounts Receivable of P400,000. The company estimates that 5% of these receivables might not be collected. If there is P12,000 (credit) balance for Allowance for Uncollectible Accounts, how much is required balance of the Allowance for Uncollectible Accounts?
Johnson Company caleulates its allowance for uncollectible'accounts as 10% of its ending balance in gross accounts recelvable. The allowance for uncollectible accounts had a credit balance of $12.000 at the beginning of 2021 No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totnled $200,100, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 22,000. Required: 1. What was the balance in gross accounts receivable as of 12/31/2020? 2. What journal entry should Johnson record to recognize bed debt expense for 2021? 3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021. 4. If Johnson instead used the direct write-off method, what would bad debt expense be for 2021?
CI On January 1, 2019, the balance in Tabor Co.'s Allowance for Bad Debts account was $13,338. During the first 11 months of the year, bad debts expense of $21,593 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2019, was $9,887. Required: a. What was the total of accounts written off during the first 11 months? (Hint Make a T-account for the Allowance for Bad Debts account.) Bad debts write-Off b. As the result of a comprehensive analysis, it is determined that the December 31, 2019, balance of the Allowance for Bad Debts account should be $9,365. Show the adjustment required in the journal entry format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to adjust the allowance account to the appropriate balance. Note: Enter debits before credits. Event General Journal Debit Credit 1
Winner Company uses the allowance method of accounting for bad debts. The following summary schedule of past due accounts was prepared as of December 31, 2019. No. of days past Collection Amount due Probability 0- 30 days 500,000 98% 31- 60 days 200,000 90% 61- 90 days 100,000 85% 91-120 days 150,000 80% Over 120 days 30,000 50% Total past due 980,000 The following information is also available: Beginning balance of Accounts Receivable P 500,000 Net credit sales for the year P 4,000,000 Collections on credit sales 3,000,000 Allowance for doubtful accounts. January 1 = 5,000 (cr) Allowance for doubtful accounts, December 31, (before adjustments) 2,000 (dr)
Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $30,000 at the beginning of 2021. No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totaled $500,000, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 55,000.Required:1. What was the balance in gross accounts receivable as of 12/31/2020?2. What journal entry should Johnson record to recognize bad debt expense for 2021?3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021.4. If Johnson instead used the direct write-off method, what would bad debt expense be for 2021?