On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Expected Percent Accounts Receivable $ 830,000 254,000 86,000 38,000 12,000 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Uncollectible 1.25% 2.00 6.50 Does this write-off directly affect Jarden's net income? 32.75 68.00 3. On June 30 of the next year, Jarden concludes that a customer's $4,750 receivable is uncollectible and the account is written off. Does this write-off directly affect Jarden's net income?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### Required Information

***The following information applies to the questions displayed below.***

On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age.

#### Accounts Receivable Analysis Table

| Accounts Receivable | Age of Accounts Receivable | Expected Percent Uncollectible |
|---------------------|-----------------------------|--------------------------------|
| $830,000            | Not yet due                 | 1.25%                          |
| $254,000            | 1 to 30 days past due       | 2.00%                          |
| $86,000             | 31 to 60 days past due      | 6.50%                          |
| $38,000             | 61 to 90 days past due      | 32.75%                         |
| $12,000             | Over 90 days past due       | 68.00%                         |

### Question 3

On June 30 of the next year, Jarden concludes that a customer's $4,750 receivable is uncollectible and the account is written off. Does this write-off directly affect Jarden's net income? 

#### Response Box:
Does this write-off directly affect Jarden’s net income? [ ]

---

### Explanation

**Accounts Receivable Analysis Table:** This table categorizes the account receivables by their age and lists the expected percentage that is estimated to be uncollectible for each category. 

1. **Not yet due:** $830,000 with 1.25% expected to be uncollectible.
2. **1 to 30 days past due:** $254,000 with 2.00% expected to be uncollectible.
3. **31 to 60 days past due:** $86,000 with 6.50% expected to be uncollectible.
4. **61 to 90 days past due:** $38,000 with 32.75% expected to be uncollectible.
5. **Over 90 days past due:** $12,000 with 68.00% expected to be uncollectible.

**Question:** Addresses whether the write-off of $4,750 directly impacts the net income of Jarden Company on June 30 of the next year.

**Study Point:** Understand how write-offs for uncollectible accounts affect financial statements, particularly in
Transcribed Image Text:### Required Information ***The following information applies to the questions displayed below.*** On December 31, Jarden Company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age. #### Accounts Receivable Analysis Table | Accounts Receivable | Age of Accounts Receivable | Expected Percent Uncollectible | |---------------------|-----------------------------|--------------------------------| | $830,000 | Not yet due | 1.25% | | $254,000 | 1 to 30 days past due | 2.00% | | $86,000 | 31 to 60 days past due | 6.50% | | $38,000 | 61 to 90 days past due | 32.75% | | $12,000 | Over 90 days past due | 68.00% | ### Question 3 On June 30 of the next year, Jarden concludes that a customer's $4,750 receivable is uncollectible and the account is written off. Does this write-off directly affect Jarden's net income? #### Response Box: Does this write-off directly affect Jarden’s net income? [ ] --- ### Explanation **Accounts Receivable Analysis Table:** This table categorizes the account receivables by their age and lists the expected percentage that is estimated to be uncollectible for each category. 1. **Not yet due:** $830,000 with 1.25% expected to be uncollectible. 2. **1 to 30 days past due:** $254,000 with 2.00% expected to be uncollectible. 3. **31 to 60 days past due:** $86,000 with 6.50% expected to be uncollectible. 4. **61 to 90 days past due:** $38,000 with 32.75% expected to be uncollectible. 5. **Over 90 days past due:** $12,000 with 68.00% expected to be uncollectible. **Question:** Addresses whether the write-off of $4,750 directly impacts the net income of Jarden Company on June 30 of the next year. **Study Point:** Understand how write-offs for uncollectible accounts affect financial statements, particularly in
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