Gowns, Inc. uses 'the percentage of receivables' basis to estimate its impairment loss. At December 31, 2020, per the accounts receivable aging report, Gowns estimates total uncollectible amounts in the future as $5,500. The beginning balance of allowance for impairment is $1,300. The accounts receivable balance at December 31, 2020 is $100,000. What is the amount of impairment loss for the year? Select one: $4,200 $5,500 $6,800 $1,300

Gowns, Inc. uses 'the percentage of receivables' basis to estimate its impairment loss. At December 31, 2020, per the accounts receivable aging report, Gowns estimates total uncollectible amounts in the future as $5,500. The beginning balance of allowance for impairment is $1,300. The accounts receivable balance at December 31, 2020 is $100,000. What is the amount of impairment loss for the year? Select one: $4,200 $5,500 $6,800 $1,300

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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Johnson Company calculates its allowance for uncollectible accounts as 20% of its ending balance in gross accounts receivable. The allowance for uncollectible accounts had a credit balance of $21,000 at the beginning of 2021. No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totaled $350,200, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 38,400 Required: 1. What was the balance in gross accounts receivable as of 12/31/2020? 2. What journal entry should Johnson record to recognize bad debt expense for 2021? 3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021. 4. If Johnson instead used the direct write-off method, what would bad debt expense be for 2021? Required 1 Required 2 Required 3 Required 4 What was…
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