A trial balance before adjustment included the following: Accounts receivable Allowance for doubtful accounts Sales revenue Sales returns and allowances Debit $140,000 Credit $ 730 610,000 8,000 Estimates of uncollectible accounts are expected to be 5% of gross accounts receivable Use the information above to determine the following: 1) Net sales (on the income statement for the period)? 2) Accounts receivable (on the balance sheet at the end of the period)? 3) Bad debt expense? 4) Allowance for doubtful accounts had a credit balance of $5,500 at the beginning of the period. What amount of receivables was written off during the period? 5) If an additional $500 of receivables were written off during the period, what would bad debt expense have been?

A trial balance before adjustment included the following: Accounts receivable Allowance for doubtful accounts Sales revenue Sales returns and allowances Debit $140,000 Credit $ 730 610,000 8,000 Estimates of uncollectible accounts are expected to be 5% of gross accounts receivable Use the information above to determine the following: 1) Net sales (on the income statement for the period)? 2) Accounts receivable (on the balance sheet at the end of the period)? 3) Bad debt expense? 4) Allowance for doubtful accounts had a credit balance of $5,500 at the beginning of the period. What amount of receivables was written off during the period? 5) If an additional $500 of receivables were written off during the period, what would bad debt expense have been?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: At the end of the current year, Accounts Receivable has a balance of $800,020; Allowance for…

A: Calculation of Bad Debt expense: Net sales = $ 3785000 Estimated at 1/2 of 1% net sales.…

Q: Allowance for Doubtful Accounts has a debit balance of $1,912 at the end of the year (before…

A: Bad Debt Expense = uncollectible receivables + Debit balance of Allowance for Doubtful Accounts =…

Q: Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of…

A: a. Adjusting entry = Balance of doubtful account - Allowance for doubtful account Adjusting entry =…

Q: Providing for Doubtful Accounts at the end of the year, the accounts receivable account has a…

A: Journal is the book of original entry in which all the transactions of the business are recorded…

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: a. Calculate the amount for adjusting entry of the uncollectible accounts.

Q: Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period.…

A: Account receivable means the amount due from customer whom we sold the goods on credit. Allowance…

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: Solution:-a Calculation of the amount of the adjusting entry for uncollectible accounts as follows…

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: Account’s receivables can be defined as the payment which is yet to be received by the business in…

Q: Providing for doubtful accounts At the end of the current year, the accounts receivable account has…

A: The journal entries are prepared to record the transactions on regular basis. The allowance for…

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: Bad debt expense :— It is the amount of receivable that are uncollectible from customer during the…

Q: A company has accounts receivable of $1,000,000 at 12/31 and estimates that the allowance for…

A: Allowance for bad debts is the provision created for the purpose of having sufficient funds if the…

Q: At the end of the current year, Accounts Receivable has a balance of $590,000; Allowance for…

A: Estimated uncollectible amount = Sales *0.25% = $2660000*0.25% = $6650

Q: At the end of the current year, Accounts Receivable has a balance of $750,000, Allowance for…

A: Journal: Recording of a business transactions in a chronological order.

Q: At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for…

A: Uncollectible accounts are those accounts receivables or debtors who have not paid amount for the…

Q: At the end of the current year, Accounts Receivable has a balance of $745,000; Allowance for…

A: Formula: Net realizable value of accounts receivable = Accounts receivable - Allowance for doubtful…

Q: At the end of the current year, the accounts receivable account has a debit balance of $6,800,000…

A: Allowance method:It is a method for accounting bad debt expense, where amount of uncollectible…

Q: Prepare the entries to record sales and collections during the period. Prepare the entry to record…

A: Bad debt expenses is amount of sales revenue that is uncollectable because a customer is unable to…

Q: At the end of the current year, Accounts Receivable has a balance of $750,000; Allowance for…

A: Bad debts expense is calculated as a percentage of sales by simply multiplying the estimated…

Q: Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of…

A: Accounts receivable Accounts receivable refers to the amounts to be received within a short period…

Q: a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the…

Q: Percent of Sales Method At the end of the current year, Accounts Recelvable has a balance of…

A: Given the total sales for the year $3960000 And Bad debts expense is 1.25% of sales

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: The allowance for doubtful accounts is created to record the estimated bad debt expense for the…

Q: Assume Simple Company had credit sales of $258,000 and cost of goods sold of $158,000 for the…

A: Bad Debt Expense - Bad Debt Expense is the expense incurred on the un-collectibility of the…

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of…

A: When an organization uses an allowance method for uncollectible accounts, then it maintains the…

Q: Providing for doubtful accounts At the end of the current year, the accounts receivable account has…

A: Under the allowance method, the company makes provisions for uncollectible accounts at the end of…

Q: Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has…

A: In order to increase the sales revenue, the business organizations sells their goods on a credit…

Q: A company had sales of $60,400 and cost of goods sold of $15,200 for the period. The company uses…

A: Bad debt expense = ($60,400 x 3%) + $440 = $2,252

Q: Allowance for Doubtful Accounts has a credit balance of $1,468 at the end of the year (before…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of…

A: The amount of uncollectible accounts is calculated by adding the balance of allowance for doubtful…

Q: Tanning Company analyzes its receivables to estimate uncollectible accounts. The accounts receivable…

A: The objective of this question is to determine the adjusting entry that Tanning Company will make…

Q: Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has…

A: The doubtful account is also known as doubtful debt which refers to an account receivable that…

Q: At the end of the current year, Accounts receivable account has a debit balance of $2,700,000 and…

A: Bad debt expense is the amount of accounts receivable that are no longer collectible from customer…

Q: Allowance for Doubtful Accounts has a credit balance of $670 at the end of the year (before…

A: Bad debt expense = Estimated Uncollectibles +/- Debit/Credit Balance of Allowance for Doubtful…

Q: At the end of the current year, the accounts receivable account has a debit balance of $1,236,000…

A: Allowance for doubtful accounts is a contract-asset account linked to accounts receivable and…

Q: the end of the current year, the accounts receivable account has a debit balance of $1,184,000 and…

A: Answer to (A) Calculation of doubtful account amount : = Sales x 1% x (1/2) =13,420,000 x 1% x (1/2)…

Q: At the end of the current year, Accounts Receivable has a balance of $192,670; Allowance for…

A: ALLOWANCE FOR DOUBTFUL DEBT ACCOUNT Allowance for Doubtful Debt Account is Considered as Contra…

Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

A trial balance before adjustment included the following:
Accounts receivable
Allowance for doubtful accounts
Sales revenue
Sales returns and allowances
Debit
$140,000
Credit
$
730
610,000
8,000
Estimates of uncollectible accounts are expected to be 5% of gross accounts receivable
Use the information above to determine the following:
1) Net sales (on the income statement for the period)?
2) Accounts receivable (on the balance sheet at the end of the period)?
3) Bad debt expense?
4) Allowance for doubtful accounts had a credit balance of $5,500 at the beginning
of the period. What amount of receivables was written off during the period?
5) If an additional $500 of receivables were written off during the period, what would
bad debt expense have been?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction to allowance for doubtful accounts

VIEW

Step 2: Calculation of net sales

VIEW

Step 3: Calculation of accounts receivable

VIEW

Step 4: Calculation of bad debts expense

VIEW

Step 5: Calculation of bad debts written off

VIEW

Step 6: Calculation of new bad debts expense

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 7 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

View Policies Current Attempt in Progress Assume the following information for Teal Mountain Corp. Accounts receivable (beginning balance) Allowance for doubtful accounts (beginning balance) Net credit sales Collections Write-offs of accounts receivable Collections of accounts previously written off (a) Account Titles and Explanation Uncollectible accounts are expected to be 6% of the ending balance in accounts receivable. (To record sales on account) (To record collection of accounts receivable) Prepare the entries to record sales and collections during the period. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) eTextbook and Media $143.000 List of Accounts 11,340 Save for Later Using multiple attempts will impact your score. 10% scare reduction after attempt 5 930,000 912.000 6,400 2,200…
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $635,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,860,000. Bad debt expense is estimated at 1.25% of sales. 1. Determine the amount of the adjusting entry for uncollectible accounts. 2. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense $635,000 ✓ 3. Determine the net realizable value of accounts receivable.
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $670,000; Allowance for Doubtful Accounts has a debit balance of $6,000; and sales for the year total $3,020,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $29,400. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable. %24 %24 %24 %24 %24
A trial balance before adjustments included the following: Debit Credit Sales 425,000 Sales returns and allowance 14,000 Accounts receivable 43,000 Allowance for doubtful accounts 760 a. If the estimate of uncollectibles is made by taking 2% of net sales, the amount of the adjustment is $ Answer 1 Question 5 b. If the estimate of uncollectibles is made by taking 10% of gross account receivables, the amount of the adjustment is $ Answer 2 Question 5
Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $350 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $7,220. Amount added Ending balance b. Credit balance of $350 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% of credit sales, which totaled $980,000 for the year. Amount added Ending balance MacBook Pro
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $4,375,000; Allowance for Doubtful Accounts has a debit balance of $21,300; and sales for the year total $102,480,000. Bad debt expense is estimated at 1/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $4 Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable.
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $969,000 and sales for the year total $10,990,000. a. The allowance account before adjustment has a credit balance of $13,100. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a credit balance of $13,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $41,900. c. The allowance account before adjustment has a debit balance of $8,500. Bad debt expense is estimated at 1/4 of 1% of sales. d. The allowance account before adjustment has a debit balance of $8,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $70,600. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. $ b. $ C. $ d. $
Gregg company uses the allowance method for recording its expected credit losses. It estimates credit losses at 3% 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 a credit balance of 12,200 before adjustment. A. Prepare the adjusting entry to record the credit losses for the year. B. Show how accounts receivable and the allowance for doubtful accounts would appear in the December 31 balance sheet. The top 2 shaded blanks have the options of Bad debts expense, allowance for doubtful accounts. The bottom 2 shaded blanks have the options of accounts receivable, less: allowance for doubtful accounts.
At the end of the current year, Accounts Receivable has a balance of $947,700; Allowance for Doubtful Accounts has a credit balance of $7,201; and credit sales for the year total $3,040,000. Bad debt expense is estimated at 1/2 of 1% of credit sales. a. Determine the amount of the adjusting entry for bad debt expense. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Adjusted Balance Bad Debt Expense c. Determine the net realizable value of accounts receivable. $
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $545,000; Allowance for Doubtful Accounts has a credit balance of $5,000; and sales for the year total $2,450,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $22,500. a. Determine the amount of the adjusting entry for uncollectible accounts.$ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.$
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $790,000; Allowance for Doubtful Accounts has a debit balance of $7,000; and sales for the year total $3,560,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $37,800. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable.
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $870,000, Allowance for Doubtful Accounts has a debit balance of $8,000, and sales for the year total $3,920,000. Bad debt expense is estimated at 3/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Adjusted Balance Debit (Credit) c. Determine the net realizable value of accounts receivable.