At December 31, its annual year-end, the accounts of Luna Architecture Inc. show the following. 1. $250,000 in sales revenue for the year, of which one-sixth was on account. 2. $1,000 credit balance in Allowance for Doubtful Accounts, as of December 31 of the prior year. 3. $20,000 debit balance in Accounts Receivable as of December 31 of the current year (prior to any write-offs of uncollectible accounts during the current year). 4. $1,200 in uncollectible accounts to be written off as of December 31 of the current year. 5. Aging schedule at December 31 of the current year, showing the following breakdown of total accounts receivable excluding amounts to be written off. Not past due Past due 1-60 days Past due over 60 days Status Required Date Dec. 31 Amount Remainder a. Prepare the entry to write off the uncollectible accounts. Date Dec. 31 $5,000 $4,000 Account Name To write off uncollectible accounts. + + To record bad debt expense. Dr. + + 0 0 b. Prepare the adjusting entry on December 31 to record bad debt expense assuming the following: Allowance for doubtful accounts is based on an aging schedule: Not past due, 1.0%; Past due 1-60 days, 2% ; and Past due over 60 days, 5%. Account Name Dr. Cr. Cr. 0 0 0 0 0 0

At December 31, its annual year-end, the accounts of Luna Architecture Inc. show the following. 1. $250,000 in sales revenue for the year, of which one-sixth was on account. 2. $1,000 credit balance in Allowance for Doubtful Accounts, as of December 31 of the prior year. 3. $20,000 debit balance in Accounts Receivable as of December 31 of the current year (prior to any write-offs of uncollectible accounts during the current year). 4. $1,200 in uncollectible accounts to be written off as of December 31 of the current year. 5. Aging schedule at December 31 of the current year, showing the following breakdown of total accounts receivable excluding amounts to be written off. Not past due Past due 1-60 days Past due over 60 days Status Required Date Dec. 31 Amount Remainder a. Prepare the entry to write off the uncollectible accounts. Date Dec. 31 $5,000 $4,000 Account Name To write off uncollectible accounts. + + To record bad debt expense. Dr. + + 0 0 b. Prepare the adjusting entry on December 31 to record bad debt expense assuming the following: Allowance for doubtful accounts is based on an aging schedule: Not past due, 1.0%; Past due 1-60 days, 2% ; and Past due over 60 days, 5%. Account Name Dr. Cr. Cr. 0 0 0 0 0 0

Name: D1 Account At December 31, its annual year-end, the accounts of Luna A
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Description: D1 Account At December 31, its annual year-end, the accounts of Luna Architecture Inc. show the following.1. $250,000 in sales revenue for the year, of which one-sixth was on account.2. $1,000 credit balance in Allowance for Doubtful Accounts, as of

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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