Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November, ITI sold services on account for $160,000 and estimated that 1 of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $80,000, aged as follows: (1) 1-30 days old, $65,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average rate of uncollectibility is (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,100 credit balance at December 31. 4 Required: 1. Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet Xx No Date General Journal Debit Credit 1 Nov 30 Bad Debt Expense 1,200 Allowance for Doubtful Accounts 1,200 S Ch.08 Homework (GRADED) + C ezto.mheducation.com/hm.tpx 2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Total > 90 31-90 1-30 0 Accounts Receivable Estimated Uncollectible (%) $ Estimated Uncollectible ($) 3. Prepare the December 31 adjusting entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View journal entry worksheet View transaction list Credit Debit General Journal Date No Bad Debt Expense Dec 31 1 Allowance for Doubtful Accounts C
Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and then uses the aging method at year-end. During November, ITI sold services on account for $160,000 and estimated that 1 of one percent of those sales would be uncollectible. At its December 31 year-end, total Accounts Receivable is $80,000, aged as follows: (1) 1-30 days old, $65,000; (2) 31-90 days old, $12,000; and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average rate of uncollectibility is (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,100 credit balance at December 31. 4 Required: 1. Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list View journal entry worksheet Xx No Date General Journal Debit Credit 1 Nov 30 Bad Debt Expense 1,200 Allowance for Doubtful Accounts 1,200 S Ch.08 Homework (GRADED) + C ezto.mheducation.com/hm.tpx 2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Total > 90 31-90 1-30 0 Accounts Receivable Estimated Uncollectible (%) $ Estimated Uncollectible ($) 3. Prepare the December 31 adjusting entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View journal entry worksheet View transaction list Credit Debit General Journal Date No Bad Debt Expense Dec 31 1 Allowance for Doubtful Accounts C
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Using the information in the first pic to solve 2 and 3
Transcribed Image Text:Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts each month and
then uses the aging method at year-end. During November, ITI sold services on account for $160,000 and
estimated that 1 of one percent of those sales would be uncollectible. At its December 31 year-end, total
Accounts Receivable is $80,000, aged as follows: (1) 1-30 days old, $65,000; (2) 31-90 days old, $12,000;
and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average rate of
uncollectibility is (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Before the end-of-year
adjusting entry is made, the Allowance for Doubtful Accounts has a $1,100 credit balance at December 31.
4
Required:
1. Prepare the November adjusting entry for bad debts. (If no entry is required for a transaction/event,
select "No Journal Entry Required" in the first account field.)
View transaction list
View journal entry worksheet
Xx
No
Date
General Journal
Debit
Credit
1
Nov 30
Bad Debt Expense
1,200
Allowance for Doubtful Accounts
1,200
Transcribed Image Text:S Ch.08 Homework (GRADED)
+
C
ezto.mheducation.com/hm.tpx
2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful
Accounts.
Total
> 90
31-90
1-30
0
Accounts Receivable
Estimated Uncollectible (%)
$
Estimated Uncollectible ($)
3. Prepare the December 31 adjusting entry. (If no entry is required for a transaction/event, select "No
Journal Entry Required" in the first account field.)
View journal entry worksheet
View transaction list
Credit
Debit
General Journal
Date
No
Bad Debt Expense
Dec 31
1
Allowance for Doubtful Accounts
C
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