E8-2 (Algo) Determining Financial Statement Effects of Bad Debt Expense Estimates and Write-Offs (LO 8-2) Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23.350. The account had an unadjusted credit balance of $11,800 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2.800 was determined to be uncollectible and was written off Required: For each transaction listed above, indicate the amount and direction ( for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) Assets Liabilities Stockholders' Equity

E8-2 (Algo) Determining Financial Statement Effects of Bad Debt Expense Estimates and Write-Offs (LO 8-2) Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23.350. The account had an unadjusted credit balance of $11,800 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2.800 was determined to be uncollectible and was written off Required: For each transaction listed above, indicate the amount and direction ( for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) Assets Liabilities Stockholders' Equity

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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E6-21 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method LO6-2. During the current year, Robby's Camera Shop had sales revenue of $160,000, of which $57,000 was on credit. At the start of the current year, Accounts Receivable showed a $20,000 debit balance and the Allowance for Doubtful Accounts showed a $1,100 credit balance. Collections of accounts receivable during the current year amounted to $55,000. Data during the current year follow: a. On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year. Required: 1. Prepare the required journal entries for the two items on December 31, the end of the accounting period. 2. Show how the amounts…
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es E6-11 (Algo) Determining Financial Statement Effects of Bad Debts Using the Percentage of Credit Sales Method LO6-2 During the current year, Sun Electronics, Incorporated, recorded credit sales of $740,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $270 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. Required: Indicate the effects of the transactions in the following table. Indicate the accounts affected and enter decreases to account categories with a minus sign. Transaction a. a. b. b. Assets Liabilities Stockholders' Equity
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An aging of a company's accounts receivable indicates that $9700 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $3010 balance, the adjustment to record bad debts for the period will require a(n)
E5.17 Preparing an Aging Schedule. East Bay Inc. uses the aging method to estimate the company's bad debt expense. Mark Evans, the president of the company, collected information about the company's outstanding accounts receivable and their probability of collection: TA 4 Probability of Non-Collection Account Age Amount 0-30 days. 31-60 days. 61-90 days. 91-120 days. Over 120 days $600,000 300,000 150,000 0.75% .... 2.00 3.00 90,000 5.00 50,000 30.00 Calculate the allowance for uncollectible accounts for East Bay, Inc., the total balance in accounts receivable, and the net realizable value of the company's accounts receivable. Assume that East Bay, Inc. adopts a policy of writing off as worthless all unpaid accounts receivable over 120 days old. How will implementation of this policy impact the net realizable value of the company's accounts receivable? Why?
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Al Khuwair Corporation's has the following data: Accounts Receivable RO 520,000 Allowance for Doubtful Accounts (debit) 5,500 Bad debts are 8% of outstanding receivables. The company should record bad debt expense as: Select one: a. RO 440 b. RO 41,600 c. RO 525,500 d. None of the answers are correct e. RO 47,100
E6-9 (Algo) Recording Bad Debt Expense Estimates and Write-Offs Using the Percentage of Credit Sales Method LO6-2 During the current year, Witz Electric, Inc., recorded credit sales of $850,000. Based on prior experience, it estimates a 3 percent bad debt rate on credit sales. Required: Prepare journal entries for each transaction: (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. On September 29 of the current year, an account receivable for $3,000 from March of the current year was determined to be uncollectible and was written off. b. The appropriate bad debt expense adjustment was recorded for the current year. View transaction list Journal entry worksheet
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