can you please check to see if my work is correct...
can you please check to see if my work is correct...
Aardvark Company sells merchandise only on credit. For the year ended December 31, 2019, the following data are available:
|
Sales (all on credit) |
$1,200,000 |
|
|
225,000 |
|
Allowance for doubtful accounts, January 1, 2019 (credit) |
15,000 |
|
Cash collections during 2019 |
1,050,000 |
|
Accounts written off as uncollected (default) during 2019 |
10,000 |
- Determine the balance of Accounts Receivable at December 31, 2019.
$225,000 + $1,200,000 - $1,050,000 - $10,000 = $365,000
- Assume that the company estimates
bad debts at 2% of credit sales. What amount will the company record as bad debt expense for 2019?
$24,000
- What
journal entry would Aardvark prepare to record bad debt expense for 2019 (related to part B)?
|
Dec. 31 |
Bad Debt Expense |
24,000 |
|
|
Allowance for doubtful accounts |
|
24,000 |
- Assume that the company estimates bad debts based on the aging method, and the aging schedule estimates that $30,100 of the year-end accounts receivable will be uncollected. What amount will the company record as bad debt expense for 2019?
$25,100
- What journal entry would Aardvark prepare to record bad debt expense for 2019 (related to part D)?
|
Dec. 31 |
Bad Debt Expense |
25,100 |
|
|
Allowance for doubtful accounts |
|
25,100 |
- What is the net realizable value of the receivables (i.e., Net A/R) to be reported on the
balance sheet at year-end (assuming the A/R aging method was used by Aardvark)?
|
Accounts Receivable |
365,000 |
|
Less: Allowance for doubtful debts |
(30,100) |
|
Net Accounts Receivables |
334,900 |
Accounts receivable is the proceeds which the company will receive from its customers to whom goods were sold on credit.
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