he Accounts Receivable balance for River Corporation is $407,000 as of January 31, 2020. Before calculating and recording January 2020 Bad Debt Expense, the Allowance for Doubtful Accounts has a credit balance of $2,000. Credit sales for January 2020 are $3,700,000, and over the past several years, 1.5% of credit sales have proven uncollectible. An aging of River Corporation’s Accounts Receivable results in a $51,950 estimate for the Allowance for Doubtful Accounts as of January 31, 2020.Part A: PERCENT OF SALES METHODAssume that River Corporation uses the percent of sales method to estimate future uncollectible accounts.a. What adjusting entry does River make to record January 2020 Bad Debt Expense? fill in the blank 2 fill in the blank 4b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet?fill in the blank 5c. What is “Bad Debt Expense” on River’s January 2020 Income Statement?fill in the blank 6Part B: ANALYSIS OF RECEIVABLES METHODAssume that River Corporation instead uses the analysis of receivables method to estimate future uncollectible accounts.a. What adjusting entry does River make to record January 2020 Bad Debt Expense? fill in the blank 8 fill in the blank 10b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet?fill in the blank 11c. What is “Bad Debt Expense” on River’s January 2020 Income Statement?fill in the blank 12

Name: he Accounts Receivable balance for River Corporation is $407,000 as of
Uploaded: 2022-11-23T13:49:29.000Z
Channel: Bartleby
Description: he Accounts Receivable balance for River Corporation is $407,000 as of January 31, 2020. Before calculating and recording January 2020 Bad Debt Expense, the Allowance for Doubtful Accounts has a credit balance of $2,000. Credit sales for January 2020

A bad debt expense is usually incurred whenever receivables seem to be no longer recoverable because a client becomes unable to fulfill their commitment to pay an existing debt owing to insolvency or other financial troubles. Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and specify the other subparts (up to 3) you’d like answereda. General Journal Dr ($) Cr ($) Bad debts expenses 55,500 To Allowance for doubtful accounts 55,500 (To record the bad debts expenses) Working Note: First of all, we have to calculate the estimated uncollectible: Estimated uncollectible = 1.5% of credit sales Credit sales = $3,700,000 Estimated uncollectible = 1.5% ×$3,700,000 Estimated uncollectible = $55,500 So, Bad debts expenses = Estimated uncollectible = $55,500 b. The value of “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet can be calculated as follow: Accounts Receivable, net on January 31, 2020 = Closing balance of accounts receivable - The closing balance of allowance for doubtful accounts Accounts Receivable, net on January 31, 2020 = $407,000 - ($2,000 + $55,500) = $349,500 So, the value of “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet is $349,500 c. The Bad debts expenses are $55,500 which would be shown in the financial statement of River in 2020.

Answered: he Accounts Receivable balance for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Practice Pack

he Accounts Receivable balance for River Corporation is $407,000 as of January 31, 2020. Before calculating and recording January 2020 Bad Debt Expense, the Allowance for Doubtful Accounts has a credit balance of $2,000. Credit sales for January 2020 are $3,700,000, and over the past several years, 1.5% of credit sales have proven uncollectible. An aging of River Corporation’s Accounts Receivable results in a $51,950 estimate for the Allowance for Doubtful Accounts as of January 31, 2020.

Part A: PERCENT OF SALES METHOD

Assume that River Corporation uses the percent of sales method to estimate future uncollectible accounts.

a. What adjusting entry does River make to record January 2020 Bad Debt Expense?

	fill in the blank 2
		fill in the blank 4

b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet?

fill in the blank 5

c. What is “Bad Debt Expense” on River’s January 2020 Income Statement?

fill in the blank 6

Part B: ANALYSIS OF RECEIVABLES METHOD

Assume that River Corporation instead uses the analysis of receivables method to estimate future uncollectible accounts.

a. What adjusting entry does River make to record January 2020 Bad Debt Expense?

	fill in the blank 8
		fill in the blank 10

b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet?

fill in the blank 11

c. What is “Bad Debt Expense” on River’s January 2020 Income Statement?

fill in the blank 12

Expert Solution

Trending now

This is a popular solution!

Learn your way

Includes step-by-step video

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.