**Exercises** 1. The following accounts receivable information pertains to Rockman Inc. | Past-Due Category | Accounts Receivable Total | Percentage Uncollectible | |-------------------|---------------------------|--------------------------| | 0-30 days | $84,550 | 8% | | 31-90 days | $32,230 | 16% | | Over 90 days | $22,170 | 37% | Estimate the allowance for doubtful accounts for Rockman Inc. based on the aging of receivables information above, and record the year-end adjusting journal entry for bad debt. 2. Journalize the following transactions in the accounts of BBH Inc., a wholesaler of arcade cabinets that uses the allowance method of accounting for uncollectible receivables: a. May 24 - Sold merchandise on account to Big Castle $18,450. The cost of goods sold was $11,000. b. Sept. 30 - Received $6,000 from Big Castle and wrote off the remainder owed on the sale of May 24 as uncollectible. c. Dec. 7 - Reinstated the account of Big Castle that had been written off on September 30 and received $12,450 cash in full payment. 3. Pronterra Co. is a merchandiser of outdoors gear. An aging of the company’s accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: | Age Class | Balance | Percent Uncollectible | |----------------|---------|-----------------------| | Not past due | $92,000 | 3% | *Explanation: The tables above list accounts receivable data categorized by the age of the receivables, showing both the total amount and the estimated percentage that is expected to be uncollectible. This information is used to calculate the allowance for doubtful accounts and adjust for potential bad debts.*
**Exercises** 1. The following accounts receivable information pertains to Rockman Inc. | Past-Due Category | Accounts Receivable Total | Percentage Uncollectible | |-------------------|---------------------------|--------------------------| | 0-30 days | $84,550 | 8% | | 31-90 days | $32,230 | 16% | | Over 90 days | $22,170 | 37% | Estimate the allowance for doubtful accounts for Rockman Inc. based on the aging of receivables information above, and record the year-end adjusting journal entry for bad debt. 2. Journalize the following transactions in the accounts of BBH Inc., a wholesaler of arcade cabinets that uses the allowance method of accounting for uncollectible receivables: a. May 24 - Sold merchandise on account to Big Castle $18,450. The cost of goods sold was $11,000. b. Sept. 30 - Received $6,000 from Big Castle and wrote off the remainder owed on the sale of May 24 as uncollectible. c. Dec. 7 - Reinstated the account of Big Castle that had been written off on September 30 and received $12,450 cash in full payment. 3. Pronterra Co. is a merchandiser of outdoors gear. An aging of the company’s accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: | Age Class | Balance | Percent Uncollectible | |----------------|---------|-----------------------| | Not past due | $92,000 | 3% | *Explanation: The tables above list accounts receivable data categorized by the age of the receivables, showing both the total amount and the estimated percentage that is expected to be uncollectible. This information is used to calculate the allowance for doubtful accounts and adjust for potential bad debts.*
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Exercises**
1. The following accounts receivable information pertains to Rockman Inc.
| Past-Due Category | Accounts Receivable Total | Percentage Uncollectible |
|-------------------|---------------------------|--------------------------|
| 0-30 days | $84,550 | 8% |
| 31-90 days | $32,230 | 16% |
| Over 90 days | $22,170 | 37% |
Estimate the allowance for doubtful accounts for Rockman Inc. based on the aging of receivables information above, and record the year-end adjusting journal entry for bad debt.
2. Journalize the following transactions in the accounts of BBH Inc., a wholesaler of arcade cabinets that uses the allowance method of accounting for uncollectible receivables:
a. May 24 - Sold merchandise on account to Big Castle $18,450. The cost of goods sold was $11,000.
b. Sept. 30 - Received $6,000 from Big Castle and wrote off the remainder owed on the sale of May 24 as uncollectible.
c. Dec. 7 - Reinstated the account of Big Castle that had been written off on September 30 and received $12,450 cash in full payment.
3. Pronterra Co. is a merchandiser of outdoors gear. An aging of the company’s accounts receivable on December 31 and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:
| Age Class | Balance | Percent Uncollectible |
|----------------|---------|-----------------------|
| Not past due | $92,000 | 3% |
*Explanation: The tables above list accounts receivable data categorized by the age of the receivables, showing both the total amount and the estimated percentage that is expected to be uncollectible. This information is used to calculate the allowance for doubtful accounts and adjust for potential bad debts.*
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