of credit sales. At the end of the year, the company ages its accounts receivable and adjusts thebalance in the Allowance for Uncollectible Accounts to correspond to the aging schedule.During July to December of 20X7, Texas Gulf Carts completed the following transactions:August 9Made a compound entry to write off uncollectibleaccounts: J. Aguilar, $200; Scaton Co., $100; and T.Taylor, $700.Sept. 30Recorded uncollectible account expense equal to 1%% of creditsales of $140,000Oct. 18Wrote off accounts receivable as uncollectible the $500 accountreceivable from Lantz Co. and the $400 acunt receivable fromNavisor Corp.Dec. 31Recorded uncollectible-account expense based on the aging ofreccivables, which follows:Age of Accounts1-3031 - 6061 – 90Over 90TotalDaysDaysDaysDays$163,000$100,000$40,000$14,0009,000Estimated percent uncollectible0.1%0.5%5%30%Required:a. Record the transactions in the journal.b. Open the Allowance for Uncollectible Account and post entries affecting thataccount. Keep a running balance.c. Show how Texas Gulf Carts should report accounts receivable on its balancesheet at December 31, 20X7.Question 4The June 30, 20X 9, balance sheet of Ram Technologies reports the following:Accounts Receivable...Allowance for Uncollectible Accounts (Cr).....$265,0007,100At the end of each quarter, RAM estimates uncollectible-account expense to be 2% of credit sales. Perry Materials uses the aging method and has completed the following analysis of the accountsreceivable:Over 90 TotalBalanceCustomer1-30 Days 31-60 Days 61-90 Days DaysJohnson$4,600$3,200$7,800Hot Pots, Inc.8001,0001,800Potter40,00055040,550Harrison3,6009004,500Marx2,000502,050Younger65,00065,000Merry Maids5,9005,900Acher12,0006,40018,400Totals$127,500$13,750$3,700 $1,050$146,000Uncollectible percentage2%10%20%40%Estimated uncollectibleamount$2,550$1,375$740$420$5,085Required:1. How much will the Uncollectible account expense for the year be?2. What will the final balance in the Allowance account be, after adjusting for uncollectibleaccount expense?

Allowance for uncollectible account is a separate provision created by the company if the company…

Answered: of credit sales. At the end of the…

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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Indiana Bones, Inc., has the following account balances at the end of the year before adjustments: Accounts Receivable $60,000 Allowance for Doubtful Accounts $800 credit balance Sales $900,000 Doubtful Accounts Expense 0 Management estimates that 11% of accounts receivable will be uncollectible. After the correct adjusting entry has been made, Doubtful Accounts Expense on the income statement for the year equals:
es Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $85,000, and it estimates that 4% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,445 credit balance before the adjustment. (b) a $425 debit balance before the adjustment. View transaction list Journal entry worksheet 1 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $1,445 credit balance before the adjustment. Note: Enter debits before credits. Transaction (a) Record entry General Journal Clear entry Debit Credit View general journal 7
At the end of the year, a company has a balance in Allowance for Uncollectible Accounts of $220 (credit) before any year-end adjustment. The balance of Accounts Receivable is $15,900. The company estimates that 14% of accounts receivable will not be collected over the next year. Record the adjustment for uncollectible accounts. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjustment for uncollectible accounts. Note: Enter debits before credits. Event General Journal Debit Credit 30 F3 888 F7 F9 F10 # 2$ % & 3 4 6 7 8 9. E R Y P { F K L < ? C V alt command option + || .. .. | H
Innovative Tech Incorporated (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $140,000 and estimated that 1/4 of 1 percent of those sales would be uncollectible. Required: Prepare the November adjusting entry for bad debts. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $86,700, aged as follows: (1) 1 to 30 days old, $72,000; (2) 31 to 90 days old, $11,000; and (3) more than 90 days old, $3,700. The average rate of uncollectibility for each age group is estimated to be (1) 11 percent, (2) 22 percent, and (3) 44 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,450 credit balance at December 31. Prepare the December 31 adjusting entry. Show how the various…
Warner Company’s year-end unadjusted trial balance shows accounts receivable of $115,000, allowance for doubtful accounts of $760 (credit), and sales of $440,000. Uncollectibles are estimated to be 1.50% of accounts receivable. Prepare the December 31 year-end adjusting entry for uncollectibles. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $1,100?
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A business has the following balances at the beginning of the year: Accounts receivable: 235000 Allowance for doubtful accounts: -15250The following summary transactions occurred during the year.Sales for the year, 100% on credit: 450000Cash collected on accounts receivable for the year: 445200Write-offs of uncollectable accounts receivable : 28200Received a cheque from a customer whose account was previously written off: 2820The overall rate used to estimate the allowance for doubtful accounts at year end: 8%Using the information above, answer the following questions.What is the balance in the accounts receivable account at year end? 1. What is the balance in the accounts receivable account at year end? 2. What is the balance in the allowance for doubtful accounts at year end? 3. What is the balance in the bad debt expense account at year end?
Casper Company uses its receivables in estimating uncollectible accounts (Bad Debt) expense. The company prepares an adjusting entry to recognize this expense at theend of the month. The beginning credit balance in the Allowance for Doubtful Accounts at July 1 was $64,000. During the month of July, the company wrote of 9,000 in Accounts Receivable but also collected a receivable of 3,000 that had been written off back in April. An aging analysis at July 31 indicated that the new credit balance in the Allowance for Doubful Accounts should be $69,000. On the adjusting entry on July 31, the debt to the Bad Debt Expense would be:
At the end of the prior year, Durney's Outdoor Outfitters reported the following information. Accounts Receivable, December 31, prior year Accounts Receivable (Gross) (A) $ 48,283 Allowance for Doubtful Accounts (XA) 8,474 Accounts Receivable (Net) (A) $ 39,809 During the current year, sales on account were $306,673, collections on account were $290,750, write-offs of bad debts were $7,059, and the bad debt expense adjustment was $4,775. Required: 1-a. Complete the Accounts Receivable and Allowance for Doubtful Accounts T-accounts to determine the balance sheet values. 1-b. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the income statement for the current year. 1-c. Complete the amounts related to Accounts Receivable and Bad Debt Expense that would be reported on the balance sheet for the current year.
Allen Bikes Ltd. has a year-end of December 31, 20x9. During the year, the company wrote off accounts receivable in the amount of $ 2,140. Allen's December 31, 20x9 general ledger account balances, prior to making any year-end adjusting journal entries, were as follows: Account Debit Credit Accounts Receivable 125,477 Allowance for Doubtful Accounts 614 Net Credit Sales 2,059,391 Allen Bikes Ltd. has estimated that bad debts will equal 2 of 1% of sales. What will be the dollar amount of the bad debt expense when making the adjusting journal entry for the year-ended December 31, 20x9 (round to the nearest whole dollar)?
The company estimates future uncollectible accounts. The company determines $16,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 4% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
AB Co made a credit sale to DE Co for $200,000 on July 19x9. It is known that at the end of 19x9 there was an outstanding receivable of $47,000. Managementestimates that $25,000 will be uncollectible.In July 19x9 the collections department stated that a receivable of $5,000 was written off frombookkeeping because it is impossible to receive payment from DE Co. Unexpectedly monthOctober 19x9 DE Co pays its outstanding debt. Requested:Prepare the adjusting entries and the journals needed to record the above transactions properlythe backup method as well as the direct deletion method!

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