Problem 5-18 (PHILCPA Adapted) On January 1, 2020, Easy Company reported accounts receivable P2,070,000 and allowance for doubtful accounts P80,000. Recoveries Credit sales Writeoffs 22,000 260,000 295,000 300,000 310,000 2017 11,100,000 12,250,000 14,650,000 15,000,000 37,000 36,000 2018 2019 2020 40,000 The collections from customers during 2020 totaled P14,000,000, excluding recoveries. Doubtful accounts are provided for as a percentage of credit sales. The entity calculated the percentage annually by using the experience of the three years prior to the current year. 1. What amount should be reported as doubtful accounts expense for 2020? a. 310,000 b. 300,000 c. 222,000 d. 378,000

Problem 5-18 (PHILCPA Adapted) On January 1, 2020, Easy Company reported accounts receivable P2,070,000 and allowance for doubtful accounts P80,000. Recoveries Credit sales Writeoffs 22,000 260,000 295,000 300,000 310,000 2017 11,100,000 12,250,000 14,650,000 15,000,000 37,000 36,000 2018 2019 2020 40,000 The collections from customers during 2020 totaled P14,000,000, excluding recoveries. Doubtful accounts are provided for as a percentage of credit sales. The entity calculated the percentage annually by using the experience of the three years prior to the current year. 1. What amount should be reported as doubtful accounts expense for 2020? a. 310,000 b. 300,000 c. 222,000 d. 378,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: On December 31, 2021, Khalid Inc. has the following balances for accounts receivable and allowance…

A: Preadjustment balance in accounts receivable = Beginning Accounts Receivable Balance + Credit sales…

Q: Question 14 Santagos Industries gathered the following information from its accounting records for…

A: Introduction: Under the allowance method for uncollectible accounts, management estimates the bad…

Q: On January 1, 2021, Chandler Company's Allowance for Doubtful Accounts had a credit balance of…

A: Estimated uncollectible account = 10% of balance in receivable = $380,000 x 10% = $38,000

Q: % of Receivables Method Jax, Inc. showed the following account balances on December 31, 2020 and…

A: Allowance for doubtful debts: This account shows the estimated amount of accounts receivable with…

Q: Clearwater Co. reported sales revenue of $4,625 in its income statement for the year ended December…

A: Bad debts expense: Bad debts expense is recognized in the books of the company when a debtor is…

Q: PAGE 467 PE9-4B At the end of the current year, Accounts Receivable has a balance of $3,460,000.…

A: Bad debt expense are recorded for uncollectible account receivables. For them allowance for…

Q: 3. Marigold Co. provides for doubtful accounts based on 3% of gross accounts receivable. The…

A: The allowance for doubtful accounts has the credit balance. The allowance for doubtful accounts is…

Q: DR CR Accounts Receivable $310,000 Allowance for Doubtful Accounts $14,000 Net Credit Sales Revenue…

A: Bad debt expenses are those accounts receivables to whom business has made credit sales on account,…

Q: SCENARIO #1 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in…

A: Bad debt is the amount which is due but is not paid by the customers.

Q: Selected unadjusted account balances at December 31, 2023, are shown below for Demon Servicing.…

A: Accounts receivables are those customer accounts to whom credit sales has been made, but amount has…

Q: Past experience indicates that 17% of total accounts receivable will eventually be uncollectible for…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: 2. Rose Company uses the Percentage of Accounts Receivable method to estimate the allowance for…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: 2. Colde Inc. has the following transactions: Jan 07, 2020 Made sales on credit for $555,000 May 13,…

A: Sales and purchases are major expenses for any trading company. Most of the time, a company will…

Q: PAGE 467 PE9-4B At the end of the current year, Accounts Receivable has a balance of $3,460,000.…

A: The correct option is as fallows

Q: 1. Determine the receivables turnover ratio and days to collect for 2019. 2. Do the measures…

A: Solution Concept Formula used Receivables turnover ratio =net credit sales /average…

Q: Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2024, accounts…

A: The allowance for uncollectible accounts is a contra-asset account that represents the estimated…

Q: P8-2A Silk Co. reported the following information on its December 31, 2014, Accounts receivable…

A: Account Receivable -The amount that a business is entitled to get from its clients for products or…

Q: Exercise 7-10 (Algo) Establish an allowance and account for bad debts [LO7-5, 7-6] Pincus Associates…

A: Journal entry is the first stage of accounting process. Journal entry used to record business…

Q: QUESTION 1 On December 31 , 2018, Ava Company had an ending balance of $5864 in its accounts…

A: NET REALIZABLE ACCOUNTS RECEIVABLE MEANS ACCOUNT RECEIVABLE MINUS THE VALUE OF THE ALLOWANCE FOR…

Q: 3. Garfield Gifts (Bad and Doubtful Debts) Assume that at 30 June 2018: • Accounts Receivable…

A: A company's sales, costs, and net income or loss for a certain time period, such as a month,…

Q: Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance…

A: Age of Accounts Receivable AccountsReceivable PercentUncollectible EstimatedUncollectible 1-30 $…

Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Problem 5-18 (PHILCPA Adapted)
P80,000.
Recoveries
Credit sales
Writeoffs
260,000
295,000
300,000
310,000
22,000
37,000
36,000
40,000
2017
11,100,000
12,250,000
14,650,000
15,000,000
2018
2019
2020
The collections from customers during 2020 totaled
P14,000,000, excluding recoveries.
Doubtful accounts are provided for as a percentage of
credit sales.
The entity calculated the percentage annually by using
the experience of the three years prior to the current year.
1. What amount should be reported as doubtful accounts
expense for 2020?
a. 310,000
b. 300,000
c. 222,000
d. 378,000
2. What amount should be reported as allowance for
doubtful accounts on December 31, 2020?
a. 110,000
b. 378,000
c. 300,000
d. 478,000
im
3. What is the net realizable value of accounts receivable
on December 31, 2020?
a. 2,650,000
b. 2,690,000
c. 2,760,000
d. 2,800,000
158

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Requirement 1

VIEW

Requirement 2 and 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Estimating allowance for doubtful accounts Devers Company has the following balances in their accounts receivable account and allowance for doubtful accounts at the end of the period ending September 30, 2021. Accounts Receviable Allow. for Doubtful Accts 505,000 3,000 Devers has a past history of uncollectible accounts as shown below: Accounts Receivable Age Class Percentage Uncollectible $275,000 1-30 days 0.50% $100,000 31-60 days 2.00% $ 60,000 61-90 days 7.00% $ 50,000 91-120 days 18.00% $ 20,000 > 120 days 60.00% Required 1. Estimate the amount that should be in the Allowance for Doubtful Accounts based on the aging of the accounts receivable schedule above…
ts The Tz Corp. estimates bad debt expense at 0.30 % of credit sales . The company reported accounts receivable and allowance for uncollectible accounts of 490,000 and 1,610 respectively December 31 2023. During 2024 , Tzs credit sales and cash collections were $327,000 and respectively , and $1,890 in accounts receivable were written off 2024 bad debt expense is $ 981 . $ 1,660 $ 1,056 . None of the options listed . $987
Debit Accounts receivable $730000 Allowance for uncollectible accounts 7500 Net credit sales Credit O $47750 O $145000. $36500, O $133750. $2900000 Bonita estimates that 5% of the gross accounts receivable will prove to be uncollectible. After adjustment at December 31, 2025, the allowance for uncollectible accounts should have a credit balance of
Chapter 5: Receivables and Sales A company reports the following amounts at 12/31/YR2 (before any year-end adjustment). Management estimates 8% of the receivables will not be collectible. The company uses the percent-of-receivables method to determine bad debt expense. Credit sales for the year 1,000,000 Accounts receiyable (A/R) 90,000 Allowance for uncollectible accounts ("AUA") 1,800 Credit Bal. Estimated percent uncollectible. 6.0% Create T accounts for A/R, AUA and Bad debt expense to help with the following questions. Accounts Receivable AUA Bad Debt Expense How much of the Accounts Receivable does management not expect to collect? What amount will the company record as bad debt expense for the YR2? What amount will be shown on the 12/31 balance sheet for Net Accounts Receivable? 1 2 3 On January 5, YR3, the company writes off an A/R they determined is uncollectible. After the write off, what is the balance in AUA? The 4 amount of the write-off is: 200 After the write off, what…
Only typed solution
A-5
Question 6 Flyzopen Limited had a $900 credit balance in Allowance for Doubtful Accounts at December 31, 2022, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: Estimated Percentage Current Accounts 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Total Accounts Receivable $150,000 15,000 10,000 7,000 10,000 $192.000 Uncollectible 1% 2% 6% 12% 30% Required: (a) Prepare the adjusting entry on December 31, 2022, to recognize bad debts expense. (b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $900 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts. 2
None
Problem 3 On January 1,2020, Jamin Company had a credit balance of P260,000 in the allowance for uncollectible accounts. Based on past experience, 2% of credit sales would be uncollectible. During the year, the entity wrote off P325,000 of uncollectible accounts. Credit sales for the year were P9,000,000. On December 31,2020, what amount should be reported as allowance for uncollectible accounts?
Current Attempt in Progress Wildhorse Company has accounts receivable of $101,200 at March 31, 2022 Credit terms are 2/10, n/30. At March 31, 2022, there is a $1,300 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Age of Accounts Current 1-30 days past due 31-90 days past due Over 90 days past due Transcribed Text (a) 2022 Balance, March 31 $61,600 22,100 8,600 8,900 2021 $75,000 Total estimated uncollectibles 8,000 2,400 1,100 $101.200 $86,500 Estimated Percentage Uncollectible 3% 5% 23% 50% c Determine the total estimated uncollectibles at March 31, 2022.
% of Credit Sales Method Jax, Inc. showed the following account balances on December 31, 2020 and recognizes bad debt at 1% of credit sales. Required 1 Calculate, record, post, and analyze the adjustment to recognize bad debt expense under the following information provided: Account DR CR Accounts receivable Allowance for doubtful accounts 982,000 25,000 Net credit sales 685,000 Page Allowance for Doubtful XA Debit General Ledger Accounts Receivable A Debit Bad Debt Expense E Credit Credit Debit Credit Transaction Analysis ASSETS LIABILITIES EQUITY REVENUES EXPENSES NET INCOME + General Journal DR CR 44 2 What is the net realizable value of Accounts receivable?
Percentage of Credit Sales Method At December 31, 2018, Garneau has a $10,000 credit balance in its allowance for doubtful accounts. Garneau estimates that 3% of its 2018 credit sales will eventually default. During 2018, Garneau had credit sales of $1,324,400. Required: Estimate the bad debt expense under the percentage of credit sales method.$