Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of eachaccounting year. Credit sales occur frequently on terms n/60. The balance of each account receivable isaged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) morethan one year past due. Experience has shown that for each age group, the average loss rate on the amountof the receivable at year-end due to uncollectibility is (a) 4 percent, (b) 10 percent, and (c) 29 percent,respectively.At December 31, 2022 (end of the current accounting year), the Accounts Receivable balance was $49,800and the Allowance for Doubtful Accounts balance was $990 (credit). In determining which accounts havebeen paid, the company applies collections to the oldest sales first. To simplify, only five customer accountsare used; the details of each on December 31, 2022, follow:B. Brown-Account ReceivableDate Explanation Debit Credit Balance03/11/2021 Sale13,90006/30/2021 Collection01/31/2022 Collection13,9003,900 10,0003,100 6,900D. Donalds-Account ReceivableDate Explanation Debit CreditBalance02/28/2022 Sale21,90021,90004/15/2022 Collection7,700 14,2005,800 8,40011/30/2022 CollectionN. Napier-Account ReceivableDate Explanation Debit CreditBalance11/30/2022 Sale8,4008,40012/15/2022 Collection1,400 7,000S. Strothers-Account ReceivableDateExplanation Debit Credit Balance03/02/2020 Sale5,50004/15/2020 Collection5,50009/01/2021 Sale9,00010/15/2021 Collection02/01/2022 Sale21,00003/01/2022 Collection5,50009,0004,900 4,10025,1005,500 19,60012/31/2022 Sale3,20022,800T. Thomas-Account ReceivableDate Explanation Debit Credit Balance12/30/2022 Sale4,7004,700P6-3 Part 33. Prepare the adjusting entry for bad debt expense at December 31, 2022.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction listJournal entry worksheet<1Record the adjusting entry for bad debt expense atDecember 31, 2022.Note: Enter debits before credits.Transaction1.General JournalDebitCredit

Accounts receivable is the total amount that is to be received from a customer in exchange for goods…

Answered: 3. Prepare the adjusting entry for bad…

3. Prepare the adjusting entry for bad debt expense at December 31, 2022. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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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Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $50,100; (2) up to 180 days past due, $15,300; and (3) more than 180 days past due, $4,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 4 percent, (2) 12 percent, and (3) 30 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet Complete this question by entering your answers in the tabs below.
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Howe is party to a patent infringement lawsuit of $200,000. Howe's attorney is certain it is remote that Howe will lose this lawsult Estimated warranty expense at 4% of sales of $360,000. Warranty claims paid in the amount S6,100. Howe is party to a lawsuit for copyright violation of $150,000. Howe's attorney advises that it is probable Howe will lose this lawsuit. The attorney estimates the loss at $150,000. Apr. 30 Jun. 30 Jul 28 Sep. 30 Dec. 31 Howe estimated warranty expense on sales for the second half of the year of $530,000 at 4%.
Sandhill Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms. Sandhill Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $455. The standalone selling price of the tablet is $234 (the cost to Sandhill Company is $171). Sandhill Company sells the Internet access service independently for an upfront payment of $270. On January 2, 2020, Sandhill Company signed 90 contracts, receiving a total of $40,950 in cash. 1. Sandhill Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $551. Sandhill Company provides the 3-year tablet service plan as a separate product with a standalone selling price of…
The controller for Swifty Corp. is concerned about certain business transactions that the company experienced during 2023. The controller, after discussing these matters with various individuals, has come to you as the CFO for advice. Swifty follows ASPE. The transactions at issue are presented below: 1. 2. 3. The company has decided to switch from the direct write-off method for accounting for bad debts to the percentage-of- sales approach. Assume that Swifty has recognized bad debt expense as the receivables have actually become uncollectible in the following way: From 2022 sales From 2023 sales 2022 10,500 2023 3,900 14,900 The controller estimates that an additional $21,800 in bad debts will be written off in 2024: $3,700 applicable to 2022 sales and $18,100 to 2023 sales. Inventory has been shipped on consignment. These transactions have been recorded as ordinary sales and billed as such (on account). At December 31, 2023, inventory billed and in the hands of consignees amounted…
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1. What is the balance of AR Corporation's Accounts Receivable as of Dec. 31, 2021? 2. What is the amount of the current accounts receivable of AR Corporation that might prove to be uncollectible? 3. What is the balance of the allowance for uncollectible accounts before adjustments of AR Corporation on December 31, 2021? 4. What is the balance of the allowance for uncollectible accounts after all the necessary adjusting entries on December 31, 2021 of AR Corporation?
Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit December 31, 2020
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