At December 31, Y5; Aylmer Inc had the follow amounts related to accounts receivable: 0- 30 days 226,900 Total sales 1,000,000 31 - 60 days 452,600 Percent of sales on account 96% 61- 90 days 78,690 91 - 120 days 45,800 Over 120 days 10,560 TOTAL 814,550 Based on prior years, and an aging analysis, Aylmer's management determined that the following percents are estimated to be uncollectible: 0- 30 days 0.30% 31 - 60 days 1.00% 61 - 90 days 1.50% 91 - 120 days 4.00% Over 120 days 8.00% REQUIRED - based on the above information, answer the four (4) following INDEPENDANT questions: 1. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expen assuming that the allowance for doubtful accounts has a CREDIT balance of 3,350 2. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense, assuming that the allowance for doubtful accounts has a DEBIT balance of 750 3. If Aylmer uses the income statement approach, given the information above, prepare the appropriate journal entry to record bad debt expense: assuming that bad debt expense is estimated to be 1.50% of credit sales 4. On January 28, Y6, a customer that owed Aylmer $4,890 declared bankruptcy. Prepare the appropriate journal entry.
At December 31, Y5; Aylmer Inc had the follow amounts related to accounts receivable: 0- 30 days 226,900 Total sales 1,000,000 31 - 60 days 452,600 Percent of sales on account 96% 61- 90 days 78,690 91 - 120 days 45,800 Over 120 days 10,560 TOTAL 814,550 Based on prior years, and an aging analysis, Aylmer's management determined that the following percents are estimated to be uncollectible: 0- 30 days 0.30% 31 - 60 days 1.00% 61 - 90 days 1.50% 91 - 120 days 4.00% Over 120 days 8.00% REQUIRED - based on the above information, answer the four (4) following INDEPENDANT questions: 1. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expen assuming that the allowance for doubtful accounts has a CREDIT balance of 3,350 2. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense, assuming that the allowance for doubtful accounts has a DEBIT balance of 750 3. If Aylmer uses the income statement approach, given the information above, prepare the appropriate journal entry to record bad debt expense: assuming that bad debt expense is estimated to be 1.50% of credit sales 4. On January 28, Y6, a customer that owed Aylmer $4,890 declared bankruptcy. Prepare the appropriate journal entry.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Looking for answers. Please include any calculations related to it for my reference. Thanks in advance.
Transcribed Image Text:At December 31, Y5; Aylmer Inc had the follow amounts related to accounts receivable:
0- 30 days
226,900
1,000,000
Total sales
31 - 60 days
452,600
Percent of sales on account
96%
61 - 90 days
78,690
91 - 120 days
45,800
Over 120 days
10,560
TOTAL
814,550
Based on prior years, and an aging analysis, Aylmer's management determined that the following percents are estimated to be uncollectible:
0- 30 days
0.30%
31 - 60 days
1.00%
61 - 90 days
1.50%
91 - 120 days
4.00%
Over 120 days
8.00%
REQUIRED - based on the above information, answer the four (4) following INDEPENDANT questions:
1. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense,
assuming that the allowance for doubtful accounts has a CREDIT balance of
3,350
2. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense,
assuming that the allowance for doubtful accounts has a DEBIT balance of
750
3. If Aylmer uses the income statement approach, given the information above, prepare the appropriate journal entry to record bad debt expense:
assuming that bad debt expense is estimated to be
1.50%
of credit sales
4. On January 28, Y6, a customer that owed Aylmer $4,890 declared bankruptcy. Prepare the appropriate journal entry.
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