During its first year of operations, Henley Company had credit sales of $3,050,000; $650,000 remained uncollected at year-end. The credit manager estimates that $40,000 of these receivables will become uncollectible. a) Prepare the journal entry to record the estimated uncollectible. b) Prepare the current assets section of the balance sheet for Henley Company. Assume that in addition to the receivables it has cash of $95,000, merchandise inventory of $135,000, and prepaid expenses of $8,000.

During its first year of operations, Henley Company had credit sales of $3,050,000; $650,000 remained uncollected at year-end. The credit manager estimates that $40,000 of these receivables will become uncollectible. a) Prepare the journal entry to record the estimated uncollectible. b) Prepare the current assets section of the balance sheet for Henley Company. Assume that in addition to the receivables it has cash of $95,000, merchandise inventory of $135,000, and prepaid expenses of $8,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.
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During its first year of operations, Crane Company had credit sales of $3,064,300; $655,000 remained uncollected at year-end. The credit manager estimates that $36,900 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit List of Accounts Prepare the current assets section of the balance sheet for Crane Company. Assume that in addition to the receivables it has cash of $94,400, inventory of $135,200, and prepaid insurance of $8,500. (List Current Assets in order of liquidity.) CRANE COMPANY Balance Sheet (Partial) 24 %24 %24
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Sparrow Company had a $220,000 beginning balance in Accounts Receivable. During the year, credit sales were $750,000 and customers' accounts collected were $640,000. What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts?
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At the end of the current year, Accounts Receivable has a balance of $700,000; the Allowance for Doubtful Accounts has a debit balance of $5,500; and credit sales for the year total $7,500,000 and cash sales totaled $1,000,000. The company estimated, based on aging of receivables, that $36,000 of receivables will be uncollectible.. Determine (a) the amount of the adjusting entry for bad debt expense and (b) the net realizable value of accounts receivable.