Qw.148. Griswold's, Incorporated (GI), began operations in January, selling inexpensive sunglasses to large retailers like Walgreensand other smaller stores. Assume the following transactions occurred during its first six months of operations.January 1 Sold merchandise to Walgreens for $13,000; the cost of these goods to Gl was $5,700.February 12 Received payment in full from Walgreens.March 1April 1May 1June 17Sold merchandise to Bravis Pharmaco on account for $2,300; the cost of these goods to Gl was $1,050.Sold merchandise to Tony's Pharmacy on account for $7,300. The cost to Gl was $4,050.Sold merchandise to Anjuli Stores on account for $1,300; the cost to Gl was $850.Received $6,150 on account from Tony's Pharmacy.Required:1. Complete the following aged listing of customer accounts at June 30.2. Estimate the Allowance for Doubtful Accounts required at June 30 assuming the following uncollectible rates: onemonth, 3 percent; two months, 4 percent, three months, 20 percent, more than three months, 30 percent.3-a. Show how Gl would report its accounts receivable on its June 30 balance sheet.3-b. What amounts would be reported on an income statement prepared for the six-month period ended June 30?

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Answered: Allowance for Doubtful Accounts

Business

Accounting

Allowance for Doubtful Accounts

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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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

Qw.148.

Griswold's, Incorporated (GI), began operations in January, selling inexpensive sunglasses to large retailers like Walgreens
and other smaller stores. Assume the following transactions occurred during its first six months of operations.
January 1 Sold merchandise to Walgreens for $13,000; the cost of these goods to Gl was $5,700.
February 12 Received payment in full from Walgreens.
March 1
April 1
May 1
June 17
Sold merchandise to Bravis Pharmaco on account for $2,300; the cost of these goods to Gl was $1,050.
Sold merchandise to Tony's Pharmacy on account for $7,300. The cost to Gl was $4,050.
Sold merchandise to Anjuli Stores on account for $1,300; the cost to Gl was $850.
Received $6,150 on account from Tony's Pharmacy.
Required:
1. Complete the following aged listing of customer accounts at June 30.
2. Estimate the Allowance for Doubtful Accounts required at June 30 assuming the following uncollectible rates: one
month, 3 percent; two months, 4 percent, three months, 20 percent, more than three months, 30 percent.
3-a. Show how Gl would report its accounts receivable on its June 30 balance sheet.
3-b. What amounts would be reported on an income statement prepared for the six-month period ended June 30?

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