Credit Losses Based on Accounts Receivable Hunter, Inc., analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible: Age Group Balance Probability of Noncollection 0-30 days past due $95,000 1% 31-60 days past due 25,000 2% 61-120 days past due 16,000 5% 121-180 days past due 11,000 10% Over 180 days past due 9,000 25% $156,000 The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $1,020 on December 31, before any adjustments. Prepare the adjusting entry for estimated credit losses on December 31. Prepare the journal entry to write off the Rose Company's account on April 10 of the following year in the amount of $925 a. General Journal Date Description Debit Credit Dec.31 Answer Answer Answer Answer Answer Answer To record allowance for credit losses. b. General Journal Date Description Debit Credit April 10 Answer Answer Answer Answer Answer Answer To write off Rose Company's account.
Credit Losses Based on Accounts Receivable Hunter, Inc., analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible: Age Group Balance Probability of Noncollection 0-30 days past due $95,000 1% 31-60 days past due 25,000 2% 61-120 days past due 16,000 5% 121-180 days past due 11,000 10% Over 180 days past due 9,000 25% $156,000 The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $1,020 on December 31, before any adjustments. Prepare the adjusting entry for estimated credit losses on December 31. Prepare the journal entry to write off the Rose Company's account on April 10 of the following year in the amount of $925 a. General Journal Date Description Debit Credit Dec.31 Answer Answer Answer Answer Answer Answer To record allowance for credit losses. b. General Journal Date Description Debit Credit April 10 Answer Answer Answer Answer Answer Answer To write off Rose Company's account.
Chapter1: Financial Statements And Business Decisions
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Credit Losses Based on
Hunter, Inc., analyzed its accounts receivable balances at December 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:
Age Group |
Balance |
Probability of Noncollection |
|---|---|---|
| 0-30 days past due | $95,000 | 1% |
| 31-60 days past due | 25,000 | 2% |
| 61-120 days past due | 16,000 | 5% |
| 121-180 days past due | 11,000 | 10% |
| Over 180 days past due | 9,000 | 25% |
| $156,000 |
The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $1,020 on December 31, before any adjustments.
- Prepare the
adjusting entry for estimated credit losses on December 31. - Prepare the
journal entry to write off the Rose Company's account on April 10 of the following year in the amount of $925
a.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| Dec.31 | Answer | Answer | Answer |
| Answer | Answer | Answer | |
| To record allowance for credit losses. |
b.
| General Journal | |||
|---|---|---|---|
| Date | Description | Debit | Credit |
| April 10 | Answer | Answer | Answer |
| Answer | Answer | Answer | |
| To write off Rose Company's account. |
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