5. Guernsey Company began operations on January 1, 2021. On December 31,2021, the entity provided doubtful accounts based on 1% of annualcredit sales.On January 1, 2022, the entity changed the method of determining theallowance for doubtful accounts by aging of accounts receivable.Days past invoice date Percent uncollectible0 - 30319091 - 180Over 180152080In addition, the entity wrote off all accounts receivable that wereover 1 year old.The entity provided the following additional information:0 - 3031 - 9091 - 180Over 180Credit salesCollections, including recoveryAccounts written offRecovery of accounts previously written offDays past invoice date at December 31202220213,000,000 2,800,0002,915,000 2,400,00027,0007,000300,00080,00060,00025,000NoneNone250,00090,00045,00015,000a. What is the allowance for doubtful accounts on December 31, 2021?b. What is the allowance for doubtful accounts on December 31, 2022?c. What amount should be reported as doubtful accounts expfor2022?

Companies generally business on a credit basis. Credit facilities sometimes lead to bad debts. To…

5. Guernsey Company began operations on January 1, 2021. On December 31, 2021, the entity provided doubtful accounts based on 1% of annual credit sales. On January 1, 2022, the entity changed the method of determining the allowance for doubtful accounts by aging of accounts receivable. Days past invoice date Percent uncollectible 0 - 30 31 - 90 91 - 180 Over 180 1 5 20 80 In addition, the entity wrote off all accounts receivable that were over 1 year old. The entity provided the following additional information: 2022 2021 3,000,000 2,800,000 2,915,000 2,400,000 27,000 7,000 0 - 30 31 90 91 - 180 Over 180 Credit sales Collections, including recovery Accounts written off Recovery of accounts previously written off Days past invoice date at December 31 300,000 80,000 60,000 25,000 None None 250,000 90,000 45,000 15,000 a. What is the allowance for doubtful accounts on December 31, 2021? b. What is the allowance for doubtful accounts on December 31, 2022? c. What amount should be reported as doubtful accounts expense for 2022?

5. Guernsey Company began operations on January 1, 2021. On December 31, 2021, the entity provided doubtful accounts based on 1% of annual credit sales. On January 1, 2022, the entity changed the method of determining the allowance for doubtful accounts by aging of accounts receivable. Days past invoice date Percent uncollectible 0 - 30 31 - 90 91 - 180 Over 180 1 5 20 80 In addition, the entity wrote off all accounts receivable that were over 1 year old. The entity provided the following additional information: 2022 2021 3,000,000 2,800,000 2,915,000 2,400,000 27,000 7,000 0 - 30 31 90 91 - 180 Over 180 Credit sales Collections, including recovery Accounts written off Recovery of accounts previously written off Days past invoice date at December 31 300,000 80,000 60,000 25,000 None None 250,000 90,000 45,000 15,000 a. What is the allowance for doubtful accounts on December 31, 2021? b. What is the allowance for doubtful accounts on December 31, 2022? c. What amount should be reported as doubtful accounts expense for 2022?

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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