At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days Current past due past due $42,000 $31,500 $5,000 Accounts receivable Allowance for doubtful accounts $154,000 Bad debt expense 4,500 (credit balance) $ Date No 1 Dec. 31 2,000 119,500X $ 2,000X 1% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) 2% 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 31-60 days General Journal 10% Over 60 days past due $6,500 Bad debt expense Allowance for doubtful accounts 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 30% Debit 2,000X Credit 2,000 X
At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position: Accounts receivable Allowance for doubtful accounts The following transactions were completed during December 2023: December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in cash and the rest on account; terms 2/10, n/60. The total cost of sales was $35,000. December 12 Collected amount due from customers for credit sales made on December 5. December 20 Collected $90,000 in cash from customers for credit sales made in November 2023. December 26 One of Imalda's customers that owed $3,000 to the company experienced financial problems and was forced to close its business in December. The full amount was considered uncollectible. Total Estimated % uncollectible The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period. Aging of Accounts Receivable 1-30 days Current past due past due $42,000 $31,500 $5,000 Accounts receivable Allowance for doubtful accounts $154,000 Bad debt expense 4,500 (credit balance) $ Date No 1 Dec. 31 2,000 119,500X $ 2,000X 1% Required: 1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these accounts.) 2% 2-a. Using the aging schedule, compute the bad debt expense for December 2023. 31-60 days General Journal 10% Over 60 days past due $6,500 Bad debt expense Allowance for doubtful accounts 2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 30% Debit 2,000X Credit 2,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
8
Transcribed Image Text:At December 1, 2023, Imalda Inc. reported the following information on its statement of financial position:
Accounts receivable
Allowance for doubtful
accounts
The following transactions were completed during December 2023:
December 5 Sold merchandise items for $67,000. An amount of $19,000 was received in
cash and the rest on account; terms 2/10, n/60. The total cost of sales
was $35,000.
December 12 Collected amount due from customers for credit sales made on December 5.
December 20 Collected $90,000 in cash from customers for credit sales made in November
2023.
December 26 One of Imalda's customers that owed $3,000 to the company experienced
financial problems and was forced to close its business in December. The
full amount was considered uncollectible.
Total
Estimated %
uncollectible
The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales
discount that is forfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the
end of the accounting period.
Aging of Accounts Receivable
1-30 days
31-60
days
Current past due past due
$42,000 $31,500 $5,000
10%
Accounts receivable
Allowance for
doubtful accounts
Bad debt
expense
$154,000
Required:
1. Determine the balances of accounts receivable and allowance for doubtful accounts at December 31, 2023, based on
the preceding information. (Hint: use T-accounts to keep track of the effects of the transactions above on these
accounts.)
No
4,500 (credit balance)
1
$
Date
Dec. 31
2-a. Using the aging schedule, compute the bad debt expense for December 2023.
2,000
119,500X
$ 2,000X
1%
2%
2-b. Prepare the journal entry to record bad debt expense for December 2023. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
Over 60
days
past due
$6,500
30%
General Journal
Bad debt expense
Allowance for doubtful accounts
Debit
2,000 X
Credit
2,000 X
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