Exercise 5-65 (Algorithmic)Average Uncollectible Account Losses and Bad Debt ExpenseThe accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts:Losses fromYearCredit SalesUncollectible Accounts*2015$869,000$10,6252016952,00014,84020171,083,00016,79020181,189,00016,850*Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year).Required:1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%).2. Assume that the credit sales for 2019 are $1,200,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales.Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar.

Credit Sales Method: The method named percentage of credit sales method is the method in which…

Answered: Exercise 5-65 (Algorithmic) Average…

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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V. Information related to Izmir A.Ş. for 2017 is summarized below. Total credit sales +920,000 369,000 23,400 Accounts receivable at December 31 Bad debts written off Instructions (a) What amount of bad debt expense will Izmir report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Izmir decides to estimate its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Izmir record if Allowance for Doubtful Accounts has a credit balance of t3,000? (c) Assume that Izmir decides to estimate its bad debt expense based on 7% of accounts receivable. What amount of bad debt expense will Izmir record if Allowance for Doubt- ful Accounts has a credit balance of t4,000? (d) Assume the same facts as in (c), except that there is a t2,000 debit balance in Allow- ance for Doubtful Accounts. What amount of bad debt expense will Izmir record?
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The company estimates 1% of sales revenue should be used to estimate for bad debt expense. what is the amount and what accounts
Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Losses from Year Credit Sales Uncollectible Accounts* 2015 $866,000 $11,125 2016 952,000 14,840 2017 1,083,000 16,790 2018 1,189,000 16,850 *Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year). Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. Enter your answer as percentage, rounded to one decimal place (e.g. .0248563 to 2.5%). 1.45 x % 2. Assume that the credit sales for 2019 are $1,300,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. Round your answer to the nearest dollar. 5,931 X
Estimating Bad Debts Expense and Reporting Receivables At December 31, Barber Company had a balance of $630,000 in its accounts receivable and an unused balance of $3,900 in its allowance for uncollectible accounts. The company then aged its accounts as follows. Current $519,000 1-60 days past due 72,000 61-180 days past due 25,500 Over 180 days past due 13,500 Total accounts receivable $630,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180 days past due, and 40% of balances over 180 days past due. The company continues to base its allowance for uncollectible accounts on this aging analysis and percentages. a. What amount of bad debts expense does Barber report on its income statement for the year? $ 14,115 b. Show how Barber's December 31 balance sheet will report the accounts receivable and the allowance for uncollectible accounts. Note: Round your answers to the nearest whole dollar. Note: Do not use…
LO 5 Calistoga Produce estimates bad debt expense at 0.30% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $489,000 and $1,470 respectively, at December 31, 2023. During 2024, Calistoga's credit sales and collections were $335,000 and $306.000, respectively, and $1,870 in accounts receivable were written off. Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2024, is: Multiple Choice O O O O $605. $1,255 $1,490. $510.
View Policies Current Attempt in Progress Vaughn Manufacturing has outstanding accounts receivable totaling $ 6.47 million as of December 31 and sales on credit during the year of $ 24.5 million. There is also a credit balance of $ 11500 in the allowance for doubtful accounts. If the company estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year? O $388200. O $ 399700. O $ 376700. O $1470000. Save for Later Attempts: 0 of 1 used Submit Answer
L01, 2 E6-2A. Credit Losses Based on Accounts Receivable Aging Hunter, Inc., analyzed its accounts receiv- able balances at December 31, and arrived at the aged balances listed below, along with the per- centage that is estimated to be uncollectible: MBC Probability of Noncollection Age Group Balance $ 90,000 0-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due Over 180 days past due 20,000 11,000 6,000 10 4,000 25 $131,000 The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $520 on December 31, before any adjustments. а. Determine the amount of the adjustment for estimated credit losses on December 31. Determine the financial statement effect of a write off of the Rose Company's account on April 10 of the following year in the amount of $425. b.
Credit Losses Based on Accounts Receivable At December 31, the Hope Company had a balance of $1,247,200 in its Accounts Receivable account and a credit balance of $11,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $1,270,400 in debit balances and $23,200 in credit balances. The company aged its accounts as follows: Current $1,056,000 0-60 days past due 120,000 61-180 days past due 52,800 Over 180 days past due 41,600 $1,270,400 In the past, the company has experienced credit losses as follows: 2% of current balances, 6% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable.Requireda. Prepare the adjusting entry to record the allowance for doubtful accounts for the year.b. Show how Accounts Receivable (including the credit balances) and the Allowance for…
Qw.8.
(a) A company has determined that the length of time a receivable is outstanding is the most appropriate credit risk characteristic for determining expected credit losses. The following is an aging schedule for the company's accounts receivable as at December 31, 2023: Customer's name Aber Bohr Chow Datz Others Expected rate of credit loss Expected credit losses Total amount owed $28,000 50,000 42,000 eTextbook and Media 27,000 158,000 $305,000 $41,160 Current (not yet due) Account Titles and Explanation $50,000 15,000 95,000 $160,000 3% $4,800 1-30 12,000 $9,000 $19,000 15,000 $36,000 6% Number of days past due $2,160 31-60 13,000 10% $3,200 61-90 $15,000 15,000 Debit $32,000 $30,000 $47,000 25% Over 90 $7,500 $27,000 20,000 On December 31, 2023, the unadjusted balance in the Allowance for Expected Credit Losses (prior to the aging analysis) was a credit of $20,000. 50% Journalize the adjusting entry to record the expected credit losses on December 31, 2023. (Credit account titles are…

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