Big Bowl, Inc. uses the aging method to estimate its bad debts. The information below has been collected regarding the company's outstanding customer accounts and their probability of collection: Probability of Non-Collection Account Age 0-30 days 31-60 days Amount Owed 0.5% $652,800 1.0% 205,700 61-90 days 1.5% 128,000 91-120 days 3.0% 75,500 Over 120 days 15.0% 29,000 The balance in Big Bowl's' Allowance for Uncollectible Accounts account at year end before adjusting for a bad debt estimate is $360. Calculate the following amounts for Big Bowl, Inc.: A. Expected bad debt expense B. Total balance in accounts receivable C. Net realizable value of Big Bowl's accounts receivable

Big Bowl, Inc. uses the aging method to estimate its bad debts. The information below has been collected regarding the company's outstanding customer accounts and their probability of collection: Probability of Non-Collection Account Age 0-30 days 31-60 days Amount Owed 0.5% $652,800 1.0% 205,700 61-90 days 1.5% 128,000 91-120 days 3.0% 75,500 Over 120 days 15.0% 29,000 The balance in Big Bowl's' Allowance for Uncollectible Accounts account at year end before adjusting for a bad debt estimate is $360. Calculate the following amounts for Big Bowl, Inc.: A. Expected bad debt expense B. Total balance in accounts receivable C. Net realizable value of Big Bowl's accounts receivable

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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As of December 31, Frappe Company has a balance of $5,000 in accounts receivable. Of this amount, $500 is past due and the remainder is not yet due. Frappe has a credit balance of $45 in the Allowance for Doubtful Accounts. Frappe Company estimates its bad debt losses using the aging of receivables method, with estimated bad debt loss rates equal to 1% of accounts not yet due and 10% of past due accounts. How will the Bad Debt Expense account be included in the required adjusting journal entry at year-end?
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Simple Things Company uses the aging method to estimate Accounts Receivable. The company's management estimates that uncollectible accounts will be $27,000. The Allowance for Bad Debts has a debit balance of $11,000 before the adjusting entry for bad debt expense. What will be the amount of bad debts expense reported on the income statement?
An aging of a company's accounts receivable indicates that $ 9500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $ 3500 debit balance, the adjustment to record bad debts for the period will require a debit to Bad Debt Expense for $ 9500. credit to Allowance for Doubtful Accounts for $ 9500. debit to Bad Debt Expense for $ 13000. debit to Bad Debt Expense for $ 6000.
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Warriors Company prepared an aging of its accounts receivable at December 31, 2023 and determined that the estimated uncollectible on that date was P85,200. During 2023, some customers' accounts were written off. Additional information is available as follows:Allowance for Bad Debts, December 31, 2022 P 63,000Bad debts expense reported in profit or loss 18,000Accounts Receivable, December 31, 2023 607,500Uncollectible accounts recovery during 2023 12,000 Question:21. How much were the accounts written off during 2023? A. P6,000 B. P7,800 C. P18,000 D. P22,200
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $279,000; (2) up to 120 days past due, $52,000; and (3) more than 120 days past due, $22,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 4.0 percent, (2) 10 percent, and (3) 32 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $300 (credit) before the end-of-period adjusting entry is made. Required: Prepare the appropriate bad debt expense adjusting entry for the current year. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet
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a. Calculate the total estimated bad debts based on the above information.
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