A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $375,000 debit Allowance for uncollectible accounts 500 debit Net Sales 800,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount shoulc be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: Accounts receivable $375,000 debit Allowance for uncollectible accounts 500 debit Net Sales 800,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount shoulc be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

Name: Multiple Choice$1,275$1,775$4.500$4,800$5,500 A company uses the perc
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Description: Multiple Choice$1,275$1,775$4.500$4,800$5,500 A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trialbalance reported the following selected amounts:Accounts recei

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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On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $95,250; Allowance for Doubtful Accounts, credit balance of $921; credit sales of $420,000. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible? O $6,636. O $5,660. O $4,794. O $5,715. O $5,770.
Innovative Tech Incorporated (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $140,000 and estimated that 1/4 of 1 percent of those sales would be uncollectible. Required: Prepare the November adjusting entry for bad debts. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $86,700, aged as follows: (1) 1 to 30 days old, $72,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $3,700. The average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,450 credit balance at December 31. Prepare the December 31 adjusting entry. Show how the various…
At the end of the prior year, Durney's Outdoor Outfitters reported the following information. Accounts Receivable, Dec. 31, prior year Accounts Receivable (Gross) (A) Allowance for Doubtful Accounts (XA) Accounts Receivable (Net) (A) $ During the current year, sales on account were $304,798, collections on account were $290,000, write-offs of bad debts were $6,984, and the bad debt expense adjustment was $4,700. Req 1A $ Required: 1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the balance sheet values. Disregard income tax considerations. 1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement for the current year. 1-c. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the balance sheet for the current year. Req 1B 48,103 8,399 39,704 Complete this question by entering your answers in the tabs below. Req 1C Complete the…
Wrangler Incorporated uses the percentage of credit sales method to estimate Bad Debt Expense. At the end of the year, the company's unadjusted trial balance inclúdes the following Accounts Receivable $ 353,000 Allowance for Doubtful Accounts (credit balance) 600 Net Credit Sales 904,000 Wrangler has experienced bad debt losses of 0.3% of credit sales in prior periods. What is the Bad Debt Expense to be recorded for the year? Multiple Choice $2.112 $3.912 $2.712 $3.312
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Los Altos, Inc. uses the allowance method of handling its credit losses. It estimates credit losses at 2% of credit sales,which were $900,000 during the year.On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had acredit balance of $10,200 before adjustment.a. Determine the amount and financial statement effect of the adjustment to record the credit losses for the year.Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenues - Expenses = Net Income b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.Note: Do not use negative signs with any of your answers.
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Percent of sales method At year-end, December 31, Ying Company estimates its bad debts as 0.5% of its annual credit sales of $975,000. Ying records its Bad Debts Expense for that estimate. 1. Prepare the journal entry to record bad debts. 2. Compute the ending balance of the Allowance for Doubtful Accounts if it has a $5,000 beginning credit balance.
At the end of the year, Brinkley Incorporated’s balance of Allowance for Uncollectible Accounts is $2,400 (debit) before adjustment. The company estimates future uncollectible accounts to be 3% of credit sales for the year. Credit sales for the year total $119,000. What adjustment would Brinkley record for Allowance for Uncollectible Accounts using the percentage-of-credit-sales method? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
GG Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $700,000 and credit sales are $2,500,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Company make to record the bad debts expense? Select one: a. Bad Debt Expense .25,000 Allowance for Doubtful Accounts 25,000 b. Bad Debt Expense.... .32,000 Accounts Receivable 32,000 C. Bad Debt Expense .32,000 Allowance for Doubtful Accounts 32,000 d. The answer does not exist e. Bad Debt Expense ..... 25,000 Accounts Receivable 25,000 HIBA F1 F2 F3 F4 F5 B/O F6 F7 F8 F9 F10 图 PRTSC SYSRQ F11 F12 # $ 4 & * 3 6 8 9 НOME 7 PGUP E Y ! ق 4 D. F H J K END PGON w. R