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December 31, 2018 and 2019, the entity provided uncollectible accounts expense based on 1% of annual credit sales. Scion Company began ope On January 1, 2019, the entity changed the method determining the allowance for uncollectible accounts by applying certain percentages to the aging of accounts receivable, of 11estikl

December 31, 2018 and 2019, the entity provided uncollectible accounts expense based on 1% of annual credit sales. Scion Company began ope On January 1, 2019, the entity changed the method determining the allowance for uncollectible accounts by applying certain percentages to the aging of accounts receivable, of 11estikl

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Scion Company began operations on January 1, 2018. On applying certain percentages to the aging of accounts receivable, uncollectible accounts expense based on 1% of annual credit On January 1, 2019, the entity changed the method of determining the allowance for uncollectible accounts by December 31, 2018 and 2019, the entity provided for Problem 5-9 (AICPA Adapted) Scion Company began operations on January 1, 2018 o sales. On January 1, 2019, the entity changed the method applying certain percentages to the aging of accounts receivabl Percent uncollectible Days past invoice date 0 - 30 31 5 90 180 20 91 80 Over 180 In addition, the entity wrote off all accounts receivable that were over 1 year old. The following additional information related to the years ended December 31, 2019 and 2018: 2019 2018 3,000,000 2,915,000 27,000 7,000 2,800,000 2,400,000 Credit sales Collections, including recovery Accounts written off Recovery of accounts previously written off none none Days past invoice date 0 - 30 31 - 90 91 - 180 Over 180 300,000 80,000 60,000 25,000 250,000 90,000 45,000 15,000 Required: 1. Determine the allowance for doubtful accounts on January 1, 2019. 2. Determine the allowance for doubtful accounts on December 31, 2019 before adjustment. 3. Determine the required allowance on December 31, 2019. 4. Prepare the adjustment to record the doubtful accounts expense for the current year.
Transcribed Image Text:Scion Company began operations on January 1, 2018. On applying certain percentages to the aging of accounts receivable, uncollectible accounts expense based on 1% of annual credit On January 1, 2019, the entity changed the method of determining the allowance for uncollectible accounts by December 31, 2018 and 2019, the entity provided for Problem 5-9 (AICPA Adapted) Scion Company began operations on January 1, 2018 o sales. On January 1, 2019, the entity changed the method applying certain percentages to the aging of accounts receivabl Percent uncollectible Days past invoice date 0 - 30 31 5 90 180 20 91 80 Over 180 In addition, the entity wrote off all accounts receivable that were over 1 year old. The following additional information related to the years ended December 31, 2019 and 2018: 2019 2018 3,000,000 2,915,000 27,000 7,000 2,800,000 2,400,000 Credit sales Collections, including recovery Accounts written off Recovery of accounts previously written off none none Days past invoice date 0 - 30 31 - 90 91 - 180 Over 180 300,000 80,000 60,000 25,000 250,000 90,000 45,000 15,000 Required: 1. Determine the allowance for doubtful accounts on January 1, 2019. 2. Determine the allowance for doubtful accounts on December 31, 2019 before adjustment. 3. Determine the required allowance on December 31, 2019. 4. Prepare the adjustment to record the doubtful accounts expense for the current year.
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