From inception of operations, Murr Company provided for uncollectible accounts expense under the allowance method. Provisions were made monthly at 2% of credit sales, bad debts written off were charge to the allowance account and recoveries of bad debts previously written off were credited to the allowance account . No year-end adjustments to the allowance account were made. The allowance for doubtful accounts was p120,000 om January 1, 2017. During the current year, credit sales totaled P9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, P90,000 of bad debts were written off, and recoveries of accounts previously written off, and recoveries of accounts previously written off amounted to P15,000 The entity prepared an aging of accounts receivable for the first time on December 31, 2017. Classification Balance Uncollectible November-December 2,000,000 2% July-October 600,000 10% January-June 400,000 25% Prior to January 1, 2017 200,000 75% 3,200,000 Based on the review of collectibility of the account balance in the "prior to January 1, 2017" aging category, additional accounts totaling P60,000 are to be written off on a December 31, 2017 Effective with the year ended December 31, 2017, the entity adopted a new accounting method for estimating allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable. 2. What amount was recorded as doubtful accounts expense for 2017? a. 180,000 b. 270,000 c. 300,000 d. 90,000 3. What amount should be reported as doubtful accounts expense in the income statement for 2017? a. 320,000 b. 180,000 c. 260,000 d. 185,000

From inception of operations, Murr Company provided for uncollectible accounts expense under the allowance method. Provisions were made monthly at 2% of credit sales, bad debts written off were charge to the allowance account and recoveries of bad debts previously written off were credited to the allowance account . No year-end adjustments to the allowance account were made. The allowance for doubtful accounts was p120,000 om January 1, 2017. During the current year, credit sales totaled P9,000,000, interim provisions for doubtful accounts were made at 2% of credit sales, P90,000 of bad debts were written off, and recoveries of accounts previously written off, and recoveries of accounts previously written off amounted to P15,000 The entity prepared an aging of accounts receivable for the first time on December 31, 2017. Classification Balance Uncollectible November-December 2,000,000 2% July-October 600,000 10% January-June 400,000 25% Prior to January 1, 2017 200,000 75% 3,200,000 Based on the review of collectibility of the account balance in the "prior to January 1, 2017" aging category, additional accounts totaling P60,000 are to be written off on a December 31, 2017 Effective with the year ended December 31, 2017, the entity adopted a new accounting method for estimating allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable. 2. What amount was recorded as doubtful accounts expense for 2017? a. 180,000 b. 270,000 c. 300,000 d. 90,000 3. What amount should be reported as doubtful accounts expense in the income statement for 2017? a. 320,000 b. 180,000 c. 260,000 d. 185,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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From inception of operations, Murr Company provided for uncollectible accounts expense
under the allowance method.

Provisions were made monthly at 2% of credit sales, bad debts written off were charge to the
allowance account and recoveries of bad debts previously written off were credited to the
allowance account .

No year-end adjustments to the allowance account were made.

The allowance for doubtful accounts was p120,000 om January 1, 2017.

During the current year, credit sales totaled P9,000,000, interim provisions for doubtful accounts
were made at 2% of credit sales, P90,000 of bad debts were written off, and recoveries of accounts
previously written off, and recoveries of accounts previously written off amounted to P15,000

The entity prepared an aging of accounts receivable for the first time on December 31, 2017.

	Classification	Balance	Uncollectible
	November-December	2,000,000	2%
	July-October	600,000	10%
	January-June	400,000	25%
	Prior to January 1, 2017	200,000	75%
		3,200,000

Based on the review of collectibility of the account balance in the "prior to January 1, 2017" aging category,
additional accounts totaling P60,000 are to be written off on a December 31, 2017

Effective with the year ended December 31, 2017, the entity adopted a new accounting method for estimating
allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.

2. What amount was recorded as doubtful accounts expense for 2017?
	a. 180,000
	b. 270,000
	c. 300,000
	d. 90,000

3. What amount should be reported as doubtful accounts expense in the income statement for 2017?
	a. 320,000
	b. 180,000
	c. 260,000
	d. 185,000

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