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Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance of $700, Study of prior year's figures indicates 1.1% of net sales are uncollectible and 5.0% of A/R are uncollectible. December 31, 2019 Age of Accounts Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Receivable 104,000 62,000 28,000 10,000 4,000 Estimated % 0.5% 5% 16% 55% Uncollectible 1. Prepare the journal entry to estimate bad debt expense assuming: a. The company uses the % of sales method b. The company uses the % of A/R method c. The company uses the aging of A/R method 2. Prepare the journal entry to write off $1,200 A/R from Grant Company on March 2, 2020. 3. Prepare the journal entries to record collection of $500 from Gr ant Company on June 5, 2020.

Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance of $700, Study of prior year's figures indicates 1.1% of net sales are uncollectible and 5.0% of A/R are uncollectible. December 31, 2019 Age of Accounts Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Receivable 104,000 62,000 28,000 10,000 4,000 Estimated % 0.5% 5% 16% 55% Uncollectible 1. Prepare the journal entry to estimate bad debt expense assuming: a. The company uses the % of sales method b. The company uses the % of A/R method c. The company uses the aging of A/R method 2. Prepare the journal entry to write off $1,200 A/R from Grant Company on March 2, 2020. 3. Prepare the journal entries to record collection of $500 from Gr ant Company on June 5, 2020.

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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Answer 2. And 3. 

Accounts Receivable Allowance Methods Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance of $700. Study of prior year's figures indicates 1.1% of net sales are uncollectible and 5.0% of A/R are uncollectible. December 31, 2019 Age of Accounts Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Receivable 104,000 62,000 28,000 10,000 4,000 Estimated % 0.5% 5% 16% 55% Uncollectible 1. Prepare the journal entry to estimate bad debt expense assuming: a. The company uses the % of sales method b. The company uses the % of A/R method The company uses the aging of A/R method C. 2. Prepare the journal entry to write off $1,200 A/R from Grant Company on March 2, 2020. 3. Prepare the journal entries to record collection of $500 from Gr ant Company on June 5, 2020.
Transcribed Image Text:Accounts Receivable Allowance Methods Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance of $700. Study of prior year's figures indicates 1.1% of net sales are uncollectible and 5.0% of A/R are uncollectible. December 31, 2019 Age of Accounts Accounts 1-30 Days 31-60 Days 61-90 Days Over 90 Days Receivable 104,000 62,000 28,000 10,000 4,000 Estimated % 0.5% 5% 16% 55% Uncollectible 1. Prepare the journal entry to estimate bad debt expense assuming: a. The company uses the % of sales method b. The company uses the % of A/R method The company uses the aging of A/R method C. 2. Prepare the journal entry to write off $1,200 A/R from Grant Company on March 2, 2020. 3. Prepare the journal entries to record collection of $500 from Gr ant Company on June 5, 2020.
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