Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) b b. Assets Allowance for Doubtful Accounts Accounts Receivable Allowance for Doubtful Accounts (11,650) (2.900) 2,900 W Liabilities Bad Debt Expense
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) b b. Assets Allowance for Doubtful Accounts Accounts Receivable Allowance for Doubtful Accounts (11,650) (2.900) 2,900 W Liabilities Bad Debt Expense
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
Please answer do not image format
![E8-2 (Algo) Determining Financial Statement Effects of Bad Debt Expense Estimates and Write-Offs [LO
8-2]
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful
Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time.
a. The appropriate bad debt adjustment was recorded.
b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off.
Required:
For each transaction listed above, indicate the amount and direction (+ for increase or - for decrease) of effects on the financial
statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with
a minus sign.)
a.
b
b
Assets
Allowance for Doubtful Accounts
Accounts Receivable
Allowance for Doubtful Accounts
(11,650)
(2.900)
itement Effects of Bad Debt Expense Estimates and Write-Offs [LO
aging of accounts receivable method to estimate that its Allowance for Doubtful
in unadjusted credit balance of $11,900 at that time.
orded.
etermined to be uncollectible and was written off.
(11,650)
(2,900)=
2,900 =
2,900-
Liabilities
Liabilities
nount and direction (+ for increase or- for decrease) of effects on the financial
g equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with
Bad Debt Expense
Stockholders' Equity
Bad Debt Expense
(11,650)
Stock!](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc8cc6a94-36f8-4576-8320-db971d5087fb%2F250977a4-4a5b-4736-a7ea-7158afbd76b5%2Fiw0nzt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E8-2 (Algo) Determining Financial Statement Effects of Bad Debt Expense Estimates and Write-Offs [LO
8-2]
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful
Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time.
a. The appropriate bad debt adjustment was recorded.
b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off.
Required:
For each transaction listed above, indicate the amount and direction (+ for increase or - for decrease) of effects on the financial
statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with
a minus sign.)
a.
b
b
Assets
Allowance for Doubtful Accounts
Accounts Receivable
Allowance for Doubtful Accounts
(11,650)
(2.900)
itement Effects of Bad Debt Expense Estimates and Write-Offs [LO
aging of accounts receivable method to estimate that its Allowance for Doubtful
in unadjusted credit balance of $11,900 at that time.
orded.
etermined to be uncollectible and was written off.
(11,650)
(2,900)=
2,900 =
2,900-
Liabilities
Liabilities
nount and direction (+ for increase or- for decrease) of effects on the financial
g equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with
Bad Debt Expense
Stockholders' Equity
Bad Debt Expense
(11,650)
Stock!
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