Financial Accounting 130 Allowance Method Bad Debt Expense Practice Problem Santa Maria Widget reviewed the following information from its accounting records for the year ended December 31, 2011, before adjustment:Sales during 2011$800,000Credit Sales are 80% of salesCollections from customers in 2011590,000 Accounts Receivable 165,000Allowance for Uncollectible Accounts (before adjustment)2,050 credit Santa Maria Widget uses the percent-of-sales method, at 1.5%, to estimate uncollectible accounts for 2011. The president of the company wants to change to the aged accounts receivable method and estimates $7,500 as the uncollectible amount for 2011. For each method of determining the estimate amount, you are to provide: 1. the adjusting Journal entry. 2. the ending balance in the Allowance account. 3. the net realizable value of accounts receivable. I have turned this assignment in twice and both times i was wrong, please help! my teacher says "I am not able to follow your work. In your original submission, your numbers were correct for the Percent of Credit Sales Method. I see that you have now put that into a journal which is correct. I do not understand your second journal entry. That is not correct. Why did you create that? I do not see your work for the Aged AR method. Please submit that with labels." Can someone please help me my teacher doesn't teach me right
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Financial Accounting 130
Allowance Method
Santa Maria Widget reviewed the following information from its accounting records for the year ended December 31, 2011, before adjustment:Sales during 2011$800,000Credit Sales are 80% of salesCollections from customers in 2011590,000
For each method of determining the estimate amount, you are to provide:
1. the
2. the ending balance in the Allowance account.
3. the net realizable value of accounts receivable.
I have turned this assignment in twice and both times i was wrong, please help!
my teacher says "I am not able to follow your work. In your original submission, your numbers were correct for the Percent of Credit Sales Method. I see that you have now put that into a journal which is correct.
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