On December 31, 2020, Extreme Fitness has adjusted balances of $890,000 in Accounts Receivable and $73,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $19,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b. Prepare the journal entry to write off the accounts on January 2, 2021. c. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? Complete this question by entering your answers in the tabs below. Req A Req B Req C What amount would the company report as its net accounts receivable on December 31, 2020? Net Accounts Receivable < Req A Req B >

On December 31, 2020, Extreme Fitness has adjusted balances of $890,000 in Accounts Receivable and $73,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $19,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b. Prepare the journal entry to write off the accounts on January 2, 2021. c. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? Complete this question by entering your answers in the tabs below. Req A Req B Req C What amount would the company report as its net accounts receivable on December 31, 2020? Net Accounts Receivable < Req A Req B >

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 6MC: Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts...

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Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts Receivable and the related Allowance for Doubtful Accounts were 1,200,000 and 60,000, respectively. An aging of accounts receivable indicated that 106,000 of the December 31, 2019, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2019, was: a. 1,034,000 b. 1,094,000 c. 1,140,000 d. 1,154,000
Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.
Refer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.
Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
Receivables Issues Magrath Company has an operating cycle of less than one year and provides credit terms for all of its customers. On April 3, 2019, the company factored, without recourse, some of its accounts receivable. Magrath does not normally factor its receivables. On August 1, 2019, Magrath sold special order merchandise and received an interest-bearing note due April 30, 2020. Magrath uses the allowance method to account for uncollectible accounts. During 2019, some accounts were written off as uncollectible, and other accounts previously written off as uncollectible were collected. Required: 1. Explain how Magrath should account for and report the accounts receivable factored on April 3, 2019. Why is this accounting treatment appropriate? 2. Explain how Magrath should report the effects of the interest-bearing note on its income statement for the year ended December 31, 2019, and its December 31, 2019, balance sheet. 3. Explain how Magrath should account for the collection of the accounts previously written off as uncollectible. 4. What are the two basic approaches to estimating uncollectible accounts under the allowance method? What is the rationale for each approach?
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.
On December 31, 2020, Extreme Fitness has adjusted balances of $960,000 in Accounts Receivable and $87,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $26,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020?
On December 31, 2020, Extreme Fitness has adjusted balances of $1,000,000 in Accounts Receivable and $95,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $30,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020? Complete this question by entering your answers in the tabs below. Req A Req B Req C1 Check my work Req C2 What amount would the company report as its net accounts receivable on December 31, 2020? Net Accounts Receivable
On December 31, 2020, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000. Required: Assume that on February 2, 2021, Extreme Fitness received a payment of $500 from one of the customers whose balance had been written off. Prepare the journal entries to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the reversal of a customer account previously written off in the amount of $500. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit View general journal Record entry Clear entry >
On December 31, 2020, Extreme Fitness has adjusted balances of $820,000 in Accounts Receivable and $59,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $12,000. Required: Assume that on February 2, 2021, Extreme Fitness received a payment of $700 from one of the customers whose balance had been written off. Prepare the journal entries to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 Record the reversal of a customer account previously written off in the amount of $700. Note: Enter debits before credits. Transaction 1 General Journal Accounts Receivable Allowance for Doubtful Accounts Debit Credit