Problem 5-22 (AICPA Adapted) Flappable Company began operations on January 1, 2018. The entity provided for doubtful accounts based on 5% of annual credit sales in prior years. On January 1, 2021, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule. wyderab 2021 2020 2019 2018 Credit sales 000 008 Collections excluding recovery Accounts written off during year Recovery of accounts written off 15,000,000 9,500,000 8,000,000 6,000,000 11,700,000 8,200,000 6,700,000 4,500,000 200,000 120,000 80,000 None 100,000 40,000 35,000 None Days Account Outstanding Amount Probability of Collection 30 days or less 3,000,000 1000 95% 150 1,500,000 80% Between 31 and 60 days Between 61 and 180 days 1,200,000 75% 50% Between 181 and one year 1,200,000 For 400 100 100,000 0% Over one year - to be written off
Problem 5-22 (AICPA Adapted) Flappable Company began operations on January 1, 2018. The entity provided for doubtful accounts based on 5% of annual credit sales in prior years. On January 1, 2021, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule. wyderab 2021 2020 2019 2018 Credit sales 000 008 Collections excluding recovery Accounts written off during year Recovery of accounts written off 15,000,000 9,500,000 8,000,000 6,000,000 11,700,000 8,200,000 6,700,000 4,500,000 200,000 120,000 80,000 None 100,000 40,000 35,000 None Days Account Outstanding Amount Probability of Collection 30 days or less 3,000,000 1000 95% 150 1,500,000 80% Between 31 and 60 days Between 61 and 180 days 1,200,000 75% 50% Between 181 and one year 1,200,000 For 400 100 100,000 0% Over one year - to be written off
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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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
Please answer the two questions, not just one.
Transcribed Image Text:for
b. 1,450,000
1,250,000
c.
d. 1,000,000
P00.000
0001030
2. What amount should be reported as doubtful accounts
expense for 2021? 2018
2019.
2020
a. 500,000 g
0
3m
Paramo
b.
Yask
600,000 Bo
700,000 Rear
c.
3m
35
yo
d. 400,000 WH
D
(80.)
(120)
EndBal 5m
6915
7350000
3. What amount should be reported as net realizable value
of accounts receivable on December 31, 2021?
a. 6,900,000
7.3350 000
oon of b
b. 7,000,000
c. 5,550,000
?
100 000
000.001
d.
5,650,000
1650 000
167 (200 000)
1400 000
YM
Transcribed Image Text:ccount
accounts
ries
otaled
ge of
using
year
Problem 5-22 (AICPA Adapted)
Flappable Company began operations on January 1, 2018.
The entity provided for doubtful accounts based on 5% of
annual credit sales in prior years.
On January 1, 2021, the entity changed the method of
determining the allowance for doubtful accounts using an
aging schedule.
Se product
2021
2020
2019
2018
Credit sales
000 008
Collections excluding recovery
Accounts written off during year
Recovery of accounts written off
15,000,000 9,500,000 8,000,000 6,000,000
11,700,000 8,200,000 6,700,000 4,500,000
200,000 120,000
80,000
None
100,000
40,000
35,000
None
Days Account
Outstanding
Amount Probability of Collection
3,000,000 10 95%
1,500,000
80%
1,200,000
75%
30 days or less
Between 31 and 60 days
Between 61 and 180 days
Between 181 and one year
Over one year - to be written off
gov
1,200,000
50%
100,000
0%
600
100
NR
RE
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