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Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. P18 Home Insert Page Layout Formulas B Total Accounts receivable 200,000 5% uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% E Number of Days Outstanding 31-60 61-90 39,000 46,000 4% 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. G 91-120 Over 120 23,000 8% 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400

Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. P18 Home Insert Page Layout Formulas B Total Accounts receivable 200,000 5% uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% E Number of Days Outstanding 31-60 61-90 39,000 46,000 4% 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. G 91-120 Over 120 23,000 8% 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400

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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P9.4

Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. 1234567 P18 Home Insert Page Layout Formulas A B Total Accounts receivable 200,000 % uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% D E Number of Days Outstanding 31-60 61-90 46,000 4% 39,000 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been deter- mined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection. e. Comment on how your answers to (a)-(d) would change if Rigney Inc. used 4% of total accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? G 23,000 8% 91-120 Over 120 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400
Transcribed Image Text:Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. 1234567 P18 Home Insert Page Layout Formulas A B Total Accounts receivable 200,000 % uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% D E Number of Days Outstanding 31-60 61-90 46,000 4% 39,000 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been deter- mined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection. e. Comment on how your answers to (a)-(d) would change if Rigney Inc. used 4% of total accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? G 23,000 8% 91-120 Over 120 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400
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Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. 1234567 P18 Home Insert Page Layout Formulas A B Total Accounts receivable 200,000 % uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% D E Number of Days Outstanding 31-60 61-90 46,000 4% 39,000 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been deter- mined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection. e. Comment on how your answers to (a)-(d) would change if Rigney Inc. used 4% of total accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? G 23,000 8% 91-120 Over 120 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400
Transcribed Image Text:Journalize transactions related to bad debts. P9.4A (LO 2) Writing Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. 1234567 P18 Home Insert Page Layout Formulas A B Total Accounts receivable 200,000 % uncollectible 6 Estimated bad debts Worksheet Data Review View C 0-30 77,000 1% D E Number of Days Outstanding 31-60 61-90 46,000 4% 39,000 5% Instructions a. Calculate the total estimated bad debts based on the information provided. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been deter- mined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection. e. Comment on how your answers to (a)-(d) would change if Rigney Inc. used 4% of total accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? G 23,000 8% 91-120 Over 120 15,000 20% Problems: Set A 9-35 a. Tot. est. bad debts $9,400
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