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Grill's Floori Allowance f receivable cchedu Hule of

Grill's Floori Allowance f receivable cchedu Hule of

FINANCIAL ACCOUNTING
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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2. Grill's Flooring Limited had credit sales of $400,000 in 2007 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2007, $120,000 of accounts receivable remains uncollected. The credit manager of Grill's Flooring prepared an aging schedule of accounts receivable and estimates that $5,000 will prove to be uncollectible. /5 marks On March 4, 2008 the credit manager authorizes a write-off of the $1,000 balance owed by A. Ludwig. Instructions a. Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2007. b. Show the balance sheet presentation of accounts receivable on December 31, 2007. On March 4, 2008 assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000, before the write- С. off. Make the appropriate entry to record the write-off of the Ludwig account. Also calculate the net realizable value of accounts receivable before and after the write-off.
Transcribed Image Text:2. Grill's Flooring Limited had credit sales of $400,000 in 2007 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2007, $120,000 of accounts receivable remains uncollected. The credit manager of Grill's Flooring prepared an aging schedule of accounts receivable and estimates that $5,000 will prove to be uncollectible. /5 marks On March 4, 2008 the credit manager authorizes a write-off of the $1,000 balance owed by A. Ludwig. Instructions a. Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2007. b. Show the balance sheet presentation of accounts receivable on December 31, 2007. On March 4, 2008 assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000, before the write- С. off. Make the appropriate entry to record the write-off of the Ludwig account. Also calculate the net realizable value of accounts receivable before and after the write-off.
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