**Preparing Year-End Adjusting Entries for Uncollectibles Using the Percent of Sales Method****Scenario:**BioWare's year-end unadjusted trial balance reveals accounts receivable of $26,000 and sales of $370,000. It is estimated that 2% of sales will be uncollectible.**Task:**Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales method.**Instructions:**1. **View Transaction List:** Click on the "View transaction list" button to review the relevant transactions that need addressing.2. **Journal Entry Worksheet:** - **Objective:** Record the estimate of uncollectibles. - **Note:** Ensure that debits are entered before credits.**Detailed Journal Entry Format:**| Date | General Journal | Debit | Credit ||------------|----------------------------|-------|--------|| December 31| | | |- **Explanation:** - Calculate the uncollectible amount: 2% of $370,000 = $7,400. - Debit the appropriate expense account (e.g., Bad Debt Expense) and credit the Allowance for Doubtful Accounts with the calculated amount of $7,400.By completing the journal entry, BioWare appropriately recognizes the estimated uncollectible accounts, ensuring accurate financial reporting at year-end.

In this question, we need to pass journal entry for bad debt expense for the year ended December 31.…

BioWare's year-end unadjusted trial balance shows accounts receivable of $26,000 and sales of $370,000. Uncollectibles are estimated to be 2% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales method. View transaction list Journal entry worksheet < 1 Record the estimate of uncollectibles. Note: Enter debits before credits. Date December 31 General Journal Debit Credit

BioWare's year-end unadjusted trial balance shows accounts receivable of $26,000 and sales of $370,000. Uncollectibles are estimated to be 2% of sales. Prepare the December 31 year-end adjusting entry for uncollectibles using the percent of sales method. View transaction list Journal entry worksheet < 1 Record the estimate of uncollectibles. Note: Enter debits before credits. Date December 31 General Journal Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

At the end of the current year, Accounts Receivable has a balance of $192,670; Allowance for Doubtful Accounts has a debit balance of $3,676; and credit sales for the year total $1,137,000. Bad debt expense is estimated at 1/2 of 1% of credit sales. a. Determine the amount of the adjusting entry for bad debt expense. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable.
Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $104,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,777 credit balance before the adjustment. (b) a $523 debit balance before the adjustment.
MKE Goods’ year-end unadjusted trial balance shows accounts receivable of $198,000, allowance for doubtful accounts of $1,200 (credit), and sales of $560,000. Uncollectibles are estimated to be 1.5% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectibles.2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $600?
The following account balances are those of Music Land Supply Company as of December 31, the end of the fiscal year, before adjustments. Accounts Receivable $ 43,600 Allowance for Doubtful Accounts 180 cr. Credit Sales 470,000 Required: Prepare the necessary adjusting entry to record Bad Debt Expense in each of the following independent cases. a. Uncollectible accounts are estimated at 1.5% of credit sales. If an amount box does not require an entry, leave it blank. Page: 1 DATE DESCRIPTION POST.REF. DEBIT CREDIT 1 Dec. 31 Bad Debt Expense fill in the blank 56a9ce08f033003_2 fill in the blank 56a9ce08f033003_3 1 2 Allowance for Doubtful Accounts fill in the blank 56a9ce08f033003_5 fill in the blank 56a9ce08f033003_6 2 b. An aging of the accounts receivable indicates that $6,850 will not be collected. If an amount box does not require an entry, leave it blank. Page: 1 DATE DESCRIPTION POST.REF. DEBIT CREDIT…
A company has net credit sales of $499000 for the year and it estimates that uncollectible accounts will be 3% of its Account Receivables balance. If Allowance for Doubtful Accounts has a credit balance of $2000 prior to adjustment, its balance after adjustment will be a credit of $16970. $14970. $12970. $14910.
The ledger of Pina Colada Corp. at the end of the current year shows Accounts Receivable $108,000; Sales Revenue $832,000; and Sales Returns and Allowances $18,100. If Pina Colada uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at (a) December 31, assuming Pina Colada determines that L. Dole's $1,000 balance is uncollectible. If Allowance for Doubtful Accounts has a credit balance of $2,000 in the trial balance, journalize the adjusting entry at (b) December 31, assuming bad debts are expected to be 11% of accounts receivable. If Allowance for Doubtful Accounts has a debit balance of $199 in the trial balance, journalize the adjusting entry (c) December 31, assuming bad debts are expected to be 8% of accounts receivable.
At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $2,000 (credit) before any year-end adjustment. The company estimates future uncollectible accounts to be 2% of credit sales for the year. Credit sales for the year total $282,000. Record the adjustment for the allowance for uncollectible accounts using the percentage-of-credit-sales method on a balance sheet.
During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $120,000, of which $60,000 was on credit. At the start of 2021, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $500 credit balance. Collections of accounts receivable during 2021 amounted to $58,000. Data during 2021 follow: a. On December 10, a customer balance of $1,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December. 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable?
Allowance for Doubtful Accounts has a credit balance of $613 at the end of the year (before adjustment), and bad debt expense is estimated at 3% of credit sales. If credit sales are $604,400, the amount of the adjusting entry to journalize the estimated uncollectible accounts receivable is a. $18,745 b. $17,519 c. cannot determine without more information d. $18,132
At the end of the current year, Accounts Receivable has a balance of $947,700; Allowance for Doubtful Accounts has a credit balance of $7,201; and credit sales for the year total $3,040,000. Bad debt expense is estimated at 1/2 of 1% of credit sales. a. Determine the amount of the adjusting entry for bad debt expense. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Adjusted Balance Bad Debt Expense c. Determine the net realizable value of accounts receivable. $
Craigmont uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $128,500, allowance for doubtful accounts of $905 (credit) and sales of $1,045,000. If uncollectible accounts are estimated to be 0.7% of sales, what is the amount of the bad debts expense adjusting entry?
Chipman Sofware recently reported the following amounts in its unadjusted trial balance at its year-end: Debits Credits Accounts Receivable $ 2,900 Allowance for Doubtful Accounts $ 20 Sales (assume all on credit) 43,000 Required: Prepare the adjusting journal entry required for the year. Assume Chipman uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year and no Bad Debt Expense has been recorded yet. Prepare the adjusting journal entry required for the year. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the year-end adjusting journal entry for recording Bad Debt Expense. Assume Chipman's year-end unadjusted balance in Allowance for Doubtful Accounts was a debit balance of $40. If one of…