Camping World Ltd sells tents and camping equipment on credit. The accounting records at30 June 2022 reveal the following. Ignore GST.Credit sales (for the year)Credit sales returns and allowances (for the year)Accounts Receivable (at 30 June 2022)Allowance for Doubtful Debts (credit balance at 30 June 2021)In the past, the company's yearly bad debts expense had been estimated at 3% of net creditsales revenue. Management requested the accountant prepare a comparison between the netcredit sales method and an aged analysis of receivables to determine which method may bemore appropriate for use in accounting for bad and doubtful debts. A historical analysis wasperformed and identified the following percentages to calculate potential bad debts:Accounts not yet dueAccounts overdue10-30 days31-60 days61-120 days121 days and overBalance$1 391 000117 000424 4501 950$228 28079 30057 20033 02026 650$424 450% estimateduncollectable1/23123045Required:(a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022under: In the past, the company's yearly bad debts expense had been estimated at 3% of net creditsales revenue. Management requested the accountant prepare a comparison between the netcredit sales method and an aged analysis of receivables to determine which method may bemore appropriate for use in accounting for bad and doubtful debts. A historical analysis wasperformed and identified the following percentages to calculate potential bad debts:Accounts not yet dueAccounts overdue10-30 days31-60 days61-120 days121 days and overBalancethe net credit sales methodthe ageing of accounts receivable method.$228 28079 30057 20033 02026 650$424 450% estimateduncollectable1/23123045Required:(a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022under:i.ii.(b) Determine the closing balance in the Allowance for Doubtful Debts account under bothmethods.(c) Explain how the choice of method will affect the Statement of Financial Position and theStatement of Financial Performance at 30 June 22.

Allowance for doubtful accounts - Allowance for doubtful accounts is the provision made by the…

Camping World Ltd sells tents and camping equipment on credit. The accounting records at 30 June 2022 reveal the following. Ignore GST. Credit sales (for the year) Credit sales returns and allowances (for the year) Accounts Receivable (at 30 June 2022) Allowance for Doubtful Debts (credit balance at 30 June 2021) Accounts not yet due Accounts overdue In the past, the company's yearly bad debts expense had been estimated at 3% of net credit sales revenue. Management requested the accountant prepare a comparison between the net credit sales method and an aged analysis of receivables to determine which method may be more appropriate for use in accounting for bad and doubtful debts. A historical analysis was performed and identified the following percentages to calculate potential bad debts: 10-30 days 31-60 days 61-120 days 121 days and over Balance $1 391 000 117 000 $228 280 79 300 57 200 33 020 26 650 $424 450 424 450 1 950 % estimated uncollectable 1/2 3 12 30 45 Required: (a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022

Camping World Ltd sells tents and camping equipment on credit. The accounting records at 30 June 2022 reveal the following. Ignore GST. Credit sales (for the year) Credit sales returns and allowances (for the year) Accounts Receivable (at 30 June 2022) Allowance for Doubtful Debts (credit balance at 30 June 2021) Accounts not yet due Accounts overdue In the past, the company's yearly bad debts expense had been estimated at 3% of net credit sales revenue. Management requested the accountant prepare a comparison between the net credit sales method and an aged analysis of receivables to determine which method may be more appropriate for use in accounting for bad and doubtful debts. A historical analysis was performed and identified the following percentages to calculate potential bad debts: 10-30 days 31-60 days 61-120 days 121 days and over Balance $1 391 000 117 000 $228 280 79 300 57 200 33 020 26 650 $424 450 424 450 1 950 % estimated uncollectable 1/2 3 12 30 45 Required: (a) Prepare the journal entries to record the Bad and Doubtful Debts expense at 30 June 2022

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 5EA: Millennium Associates records bad debt using the allowance, income statement method. They recorded...

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Clovis Enterprises reports $845,500 in credit sales for 2018 and $933,000 in 2019. It has a $758,000 accounts receivable balance at the end of 2018 and $841,000 at the end of 2019. Clovis uses the income statement method to record bad debt estimation at 4% during 2018. To manage earnings more favorably, Clovis changes bad debt estimation to the balance sheet method at 5% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Clovis Enterprises in 2019 as a result of its earnings management.
Ink Records recorded $2,333,898 in credit sales for the year and $1,466,990 in accounts receivable. The uncollectible percentage is 3% for the income statement method and 5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $20,254; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Fortune Accounting reports $1,455,000 in credit sales for 2018 and $1,678,430 in 2019. It has an $825,000 accounts receivable balance at the end of 2018 and $756,000 at the end of 2019. Fortune uses the balance sheet method to record bad debt estimation at 7.5% during 2018. To manage earnings more favorably, Fortune changes bad debt estimation to the income statement method at 5.5% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Fortune in 2019 as a result of its earnings management.
Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. 2. Assume that the credit sales for 2019 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of loses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. 3. CONCEPTUAL CONNECTION Do you believe this estimate of bad debt expense is reasonable? 4. CONCEPTUAL CONNECTION How would you estimate 2019 bad debt expense if losses from uncollectible accounts for 2018 were What other action would management consider?
Hardys Landscape Services total revenue on account for 2018 amounted to 273,205. The company, which uses the allowance method, estimates bad debts at percent of total revenue on account. Required Journalize the following selected entries: 2012 Dec. 12Record services performed on account for E. E. Morton, 245. 31Record the adjusting entry for Bad Debts Expense. 31Record the closing entry for Bad Debts Expense. 2013 Feb. 18Write off the account of E. E. Morton as uncollectible, 245. Check Figure Adjusting entry amount, 1,366.03
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Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2023 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $37,000 During 2024, credit sales were $1,785,000, cash collections from customers $1,865,000, and $42,000 in accounts receivable were written off. In addition, $3,700 was collected from a customer whose account was written off in 2023. An aging of accounts receivable at December 31, 2024, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year- End Receivables in Group 60% 10 20 10 $ 467,000 Percent Uncollectible 38 5 25 45 Required: 1. Prepare summary journal entries to account for the 2024 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the…
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CAN SOMEONE HELP ME FIGURE OUT THE TOTAL ESTIMATED UNCOLLECTIBIES AND THE BAD DEBIT EXPENSE ? Skysong Company has accounts receivable of $112,400 at March 31, 2020. Credit terms are 2/10, n/30. At March 31, 2020, there is a $1,500 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below.
At January 1, 2025, XYZ Company had an allowance for doubtful accounts with a $39,300 credit balance. XYZ Company reported the following information for 2025: Sales revenue Cash collections from customers Write-offs of uncollectible accounts Recoveries of previously written-off accounts Bad debt expense not past due 1-30 days past due 31-60 days past due 61-90 days past due over 90 days past due total accounts receivable $392,800 $307,500 ? In order to estimate the bad debt expense, XYZ Company prepared the following aging schedule at December 31, 2025: Accounts Receivable $181,000 $ 36,000 $ 42,000 $ 21,000 $ 13,000 $293,000 $ 14,600 $ 31,090 % Uncollectible 3% 7% 11% 24% 46% Calculate XYZ Company's accounts receivable balance at January 1, 2025.
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