On December 31, 2021, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2021. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible. Instructions Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions. You need not include dollar signs, but please do insert commas when needed. (a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment. (b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment. (1) Percentage-of-receivables basis: (a) Bad Debt Expense.... Allowance for Doubtful Accounts... (b) Bad Debt Expense.... Allowance for Doubtful Accounts. m 144

On December 31, 2021, the balance in Megan's Products Accounts Receivable was $680,000 and net credit sales amounted to $3,800,000 during 2021. An aging analysis of the accounts receivable indicated that $40,000 in accounts are expected to be uncollectible. Instructions Prepare the adjusting entries to record estimated bad debt expense using the percentage-of-receivables basis under each of the following independent assumptions. You need not include dollar signs, but please do insert commas when needed. (a) Allowance for Doubtful Accounts has a credit balance of $3,200 before adjustment. (b) Allowance for Doubtful Accounts has a debit balance of $730 before adjustment. (1) Percentage-of-receivables basis: (a) Bad Debt Expense.... Allowance for Doubtful Accounts... (b) Bad Debt Expense.... Allowance for Doubtful Accounts. m 144

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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For its fiscal year ended December 31, 2023, Fruitful Products had credit sales of $750,000. At year end, the unadjusted trial balance shows a debit balance of $1,800 in the Allowance for Doubtful Accounts (AFDA), and $140,000 in Accounts Receivable. The credit manager prepared an aging schedule of accounts receivable and estimates that $5,155 will prove to be uncollectible. On March 4, 2024, the credit manager authorizes a write off of the $2,862 balance owed by Sand Beach. Instructions Credit sales: $750,000 Unadjusted AFDA at year end: $1,800 Accounts Receivable at year end: $140,000 Estimated uncollectible amount from aging schedule: $5,155 (a)Prepare the adjusting entry to record the estimated bad debt expenses for 2023. (b) Show the statement of financial position presentation of accounts receivable at December 31, 2023. (c) On March 4, 2024, before the write off, assume the balance of Accounts Receivable account is $175,000 and the balance of Allowance for Doubtful Accounts is a…
Allowance for Doubtful Accounts has a credit balance of $843 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $13,733. Which of the following entries records the proper adjustment for Bad Debt Expense? Select the correct answer. debit Allowance for Doubtful Accounts, $12,890; credit Bad Debt Expense, $12,890 debit Bad Debt Expense, $12,890; credit Allowance for Doubtful Accounts, $12,890 debit Allowance for Doubtful Accounts, $14,576; credit Bad Debt Expense, $14,576 debit Bad Debt Expense, $14,576; credit Allowance for Doubtful Accounts, $14,576
Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods?
At the end of the current year, Accounts Receivable has a balance of $700,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of net sales. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance of Doubtful Accounts; and Bad Debt Expense; and (c) the net realizable value of accounts receivable
Allowance for Doubtful Accounts has a credit balance of $1,468 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $20,012. Which of the following entries records the proper adjustment for bad debt expense? a.debit Allowance for Doubtful Accounts, $18,544; credit Bad Debt Expense, $18,544 b.debit Bad Debt Expense, $18,544; credit Allowance for Doubtful Accounts, $18,544 c.debit Allowance for Doubtful Accounts, $21,480; credit Bad Debt Expense, $21,480 d.debit Bad Debt Expense, $21,480; credit Allowance for Doubtful Accounts, $21,480
On December 31, 2021, Vaden Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries: Accounts receivable $350,000 Allowance for doubtful accounts 400 (credit balance) Sales revenue (all credit sales) 1,050,000 Required: Prepare the necessary year-end adjusting entry to estimate bad debt expense for each of the following independent assumptions: Accounts Receivable is aged into three categories – Current $210,000, 30 – 60 days past due - $80,000 and >60 days past due - $60,000. Additionally, the amount uncollectible for each category is 5% for current, 10% for 30-60 days and 25% for > 60 days. It is estimated that 2% of credit sales for the year will prove to be uncollectible.
Tanning Company analyzes its receivables to estimate uncollectible accounts. The accounts receivable balance is $368,000 and credit sales are $1,000,000. An aging of accounts receivable estimates that $29,440 of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? a. Account Debit Credit Bad Debt Expense 29,440 Allowance for Doubtful Accounts 29,440 b. Account Debit Credit Bad Debt Expense 27,440 Allowance for Doubtful Accounts 27,440 c. Account Debit Credit Bad Debt Expense 94,320 Allowance for Doubtful Accounts 94,320 d. Account Debit Credit Bad Debt Expense 31,440 Allowance for Doubtful Accounts 31,440
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $35,000 $ 457,000 During 2021, credit sales were $1,775,000, cash collections from customers $1,855,000, and $40,000 in accounts receivable were written off. In addition, $3,500 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following: Percentage of Year-End Percent Age Group Receivables in Group Uncollectible 0−60 days 65 % 4 % 61−90 days 15 10 91−120 days 15 30 Over 120 days 5 50 Required:1. Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.2. Prepare the…
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following. Current assets: Receivables, net of allowance for uncollectible accounts of $45,000 $507,000 During 2021, credit sales were $1,825,000, cash collections from customers $1,905,000, and $54,000 in accounts receivable were written off. In addition, $4,500 was collected from a customer whose account was written off in 202. An aging of accounts receivable at December 31, 2021, reveals the following: Percentage of Year-End Percent Age Group Receivables in Group Uncollectible 0-60 days…
Blue, Inc. had net sales in 2025 of $1,447,100. At December 31, 2025, before adjusting entries, the balances in selected accounts were Accounts Receivable $351,700 debit, and Allowance for Doubtful Accounts $2,660 credit. If Blue estimates that 7% of its receivables will prove to be uncollectible. Prepare the December 31, 2025, journal entry to record bad debt expense. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Dec. 31, 2025 Account Titles and Explanation Bad Debt Expense Allowance for Doubtful Accounts eTextbook and Media Debit 27279 Credit 27279
Allowance for Doubtful Accounts has a credit balance of $670 at the end of the year (before adjustment), and an analysis of accounts in the customer ledger indicates the estimated amount of uncollectible accounts should be $16,220. Based on this estimate, which of the following adjusting entries should be made? Select the correct answer. debit Allowance for Doubtful Accounts, $670; credit Bad Debt Expense, $670 debit Bad Debt Expense, $670; credit Allowance for Doubtful Accounts, $670 debit Bad Debt Expense, $15,550; credit Allowance for Doubtful Accounts, $15,550 debit Allowance for Doubtful Accounts, $16,890; credit Bad Debt Expense, $16,890
At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful Accounts has a credit balance of $7,500; and net sales for the year total $3,500,000. Bad debt expense is estimated at 1⁄2of 1% of net sales. Determine:The amount of the adjusting entry for uncollectible accounts;The adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense;The net realizable value of accounts receivable.