From inception af aperations. XYZ Company pravided for uncollectible accounts receivableunder the allowance method using the percentage of sales method.The balance in the allowance for doubtful accounts was on January 1, 2020.During the current year, credit sales totaled interim provisians for doubtful accounts weremade at 2% of credit sales, P300,000 af bad debts were written off, and recaveries ofaccounts previously written off amounted to PS0,00.The aging of accounts receivable showed the following summaryCollectibleClassificationNovember to DecemberJuly to October| January to JunePriar to January 1, 2020Balance5.000,00095%2.000,0001.500.000400.00090%75%25%Based on the review of collectibility of the account balances in "prior to January 1, 2020aging category, additional accounts totaling P100,000 are to be written off on December 31,2020.Effective with the year ended December 31, 2020, the entity adopted a new accountingmethod for estimating the alowance for doubtful accounts at the amount indicated by theyear-end aging of accounts receivableRequired:a. Determine the allowance for doubtful accounts before adjustment.b. Determine the required allowance for doubtful accounts on December 31, 2020.c. Prepare adjusting entry ta record the doubtful accounts expense for 2020.

Given: The balance in the allowance for doubtful accounts was on January 1, 2020 During the current…

Based on the review of collectibility of the account balances in "prior to January 1, 202 aging category, additional accounts totaling P100,000 are to be written off on December 2020. Effective with the year ended December 31, 2020, the entity adopted a new accounti method for estimating the allowance for doubtful accounts at the amount indicated by t year-end aging of accounts receivable. Required: a. Determine the allowance for doubtful accounts before adjustment. b. Determine the required allowance for doubtful accounts on December 31, 2020, c Prepare adjusting entry ta record the daubtful accounts expense for 2020.

Based on the review of collectibility of the account balances in "prior to January 1, 202 aging category, additional accounts totaling P100,000 are to be written off on December 2020. Effective with the year ended December 31, 2020, the entity adopted a new accounti method for estimating the allowance for doubtful accounts at the amount indicated by t year-end aging of accounts receivable. Required: a. Determine the allowance for doubtful accounts before adjustment. b. Determine the required allowance for doubtful accounts on December 31, 2020, c Prepare adjusting entry ta record the daubtful accounts expense for 2020.

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

From inception af aperations. XYZ Company pravided for uncollectible accounts receivable
under the allowance method using the percentage of sales method.
The balance in the allowance for doubtful accounts was on January 1, 2020.
During the current year, credit sales totaled interim provisians for doubtful accounts were
made at 2% of credit sales, P300,000 af bad debts were written off, and recaveries of
accounts previously written off amounted to PS0,00.
The aging of accounts receivable showed the following summary
Collectible
Classification
November to December
July to October
| January to June
Priar to January 1, 2020
Balance
5.000,000
95%
2.000,000
1.500.000
400.000
90%
75%
25%
Based on the review of collectibility of the account balances in "prior to January 1, 2020
aging category, additional accounts totaling P100,000 are to be written off on December 31,
2020.
Effective with the year ended December 31, 2020, the entity adopted a new accounting
method for estimating the alowance for doubtful accounts at the amount indicated by the
year-end aging of accounts receivable
Required:
a. Determine the allowance for doubtful accounts before adjustment.
b. Determine the required allowance for doubtful accounts on December 31, 2020.
c. Prepare adjusting entry ta record the doubtful accounts expense for 2020.

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What amount should be reported as doubtful accounts expense for the current year? Please include solutions with the answers. Thank you!
Submit it in excel form E9.8
Adjusting journal entry for the allowance for doubtful account.
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