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 Chipman's main customers declared bankruptcy after year-end, what journal entry would be used to write off its $10 balance?
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 Chipman's main customers declared bankruptcy after year-end, what journal entry would be used to write off its $10 balance?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 2CE: Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit...
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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
Chipman Sofware recently reported the following amounts in its unadjusted
| Debits | Credits | |
|---|---|---|
| $ 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 itsBad 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 Chipman's main customers declared bankruptcy after year-end, what journal entry would be used to write off its $10 balance?
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