2:Company B also uses the Analysis of Receivables method. However, Management has asked us to take a look at the Income Statement Impact if we change the Uncollectible Percentages for Each Budget of Aging. The aging schedule looks like the following: Customer Total Due Current 1-60 Past Due 61+Past Due A 1,000 1,000 B 1,500 1,500 800 800 2,000 2,000 E 500 500 Total: 5,800 2,800 1,000 2,000 Aging Category Current (Not past due) As Is Proposed 3% 2% 1- 60 past due 61+ days past due 5% 4% 9% 8% The balances in the accounts before any adjustments are as follows: current Sales are $400,000, Allowance for Doubtful Accounts has a Credit balance of $250, and bad debt expense has a debit balance of $2,000. What would be the adjusting entry under the As Is Calculation? What would be the adjusting entry under the Proposed Calculation?

2:Company B also uses the Analysis of Receivables method. However, Management has asked us to take a look at the Income Statement Impact if we change the Uncollectible Percentages for Each Budget of Aging. The aging schedule looks like the following: Customer Total Due Current 1-60 Past Due 61+Past Due A 1,000 1,000 B 1,500 1,500 800 800 2,000 2,000 E 500 500 Total: 5,800 2,800 1,000 2,000 Aging Category Current (Not past due) As Is Proposed 3% 2% 1- 60 past due 61+ days past due 5% 4% 9% 8% The balances in the accounts before any adjustments are as follows: current Sales are $400,000, Allowance for Doubtful Accounts has a Credit balance of $250, and bad debt expense has a debit balance of $2,000. What would be the adjusting entry under the As Is Calculation? What would be the adjusting entry under the Proposed Calculation?

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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Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts.Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts morethan 60 days are considered old and have a 40% uncollectible rate.Required:1. If YOC has $100,000 of young accounts and $400,000 of old accounts, how much should bereported in the Allowance for Doubtful Accounts?2. If YOC’s Allowance for Doubtful Accounts currently has an unadjusted credit balance of$40,000, how much should be credited to the account?3. If YOC’s Allowance for Doubtful Accounts has an unadjusted debit balance of $5,000, howmuch should be credited to the account?4. Explain how YOC’s Allowance for Doubtful Accounts could have a debit balance
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Net Zero Products, a wholesaler of sustainable raw materials. Prepared the following aging of receivables analysis. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 153,500 $ 91,000 $ 29,000 $ 12,500 $ 9,500 $ 11,500 Percent uncollectible 1 % 2 % 4 % 6 % 10 % 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 $2,100 credit.
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Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 5% uncollectible rate. Accounts more than 60 days are considered old and have a 40% uncollectible rate. Required: 1. If YOC has $118,000 of young accounts and $320,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $32,000, how much should be credited to the account? 3. If YOC's Allowance for Doubtful Accounts has an unadjusted debit balance of $4,200, how much should be credited to the account? 1 Amount to be Reported 2. Amount to be Credited 3. Amount to be Credited
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