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Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Age Current 1-15 days past due 16-45 days past due 46-90 days past due Over 90 days past due Required: Amount $20,800 5,300 3,100 3,600 2,400 $35,200 Proportion Expected to Default 0.01 0.02 0.08 0.15 0.30 1. Determine the desired postadjustment balance in allowance for doubtful accounts. 1,818 X 3. Compute bad debt expense. 17,438 X 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 15,620

Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Age Current 1-15 days past due 16-45 days past due 46-90 days past due Over 90 days past due Required: Amount $20,800 5,300 3,100 3,600 2,400 $35,200 Proportion Expected to Default 0.01 0.02 0.08 0.15 0.30 1. Determine the desired postadjustment balance in allowance for doubtful accounts. 1,818 X 3. Compute bad debt expense. 17,438 X 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 15,620

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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Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Age Current 1-15 days past due 16-45 days past due 46-90 days past due Over 90 days past due Required: Amount $20,800 5,300 3,100 3,600 2,400 $35,200 15,620 Proportion Expected to Default 1. Determine the desired postadjustment balance in allowance for doubtful accounts. 1,818 X 0.01 0.02 0.08 0.15 0.30 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 17,438 X Previous Next
Transcribed Image Text:Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Age Current 1-15 days past due 16-45 days past due 46-90 days past due Over 90 days past due Required: Amount $20,800 5,300 3,100 3,600 2,400 $35,200 15,620 Proportion Expected to Default 1. Determine the desired postadjustment balance in allowance for doubtful accounts. 1,818 X 0.01 0.02 0.08 0.15 0.30 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 17,438 X Previous Next
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