Problem 8-12 (IAA) Lucid Company showed the following balances on Decembe 31: Accounts receivable-unassigned Accounts receivable-assigned Allowance for doubtful accounts-January 1 Receivable from factor Note payable-bank 1,000,000 300,000 30,000 40,000 240,000 During the current year, the entity found itself in financial distress and decided to resort to receivable financing. On June 30, the entity factored P200,000 of accounts receivable to a finance entity. The finance entity charged a factoring fee of 5% of the accounts factored and withheld 20% of the amount factored. On December 31, the entity assigned P300,000 of accounts receivable to a bank under a nonnotification basis. d 80% less a service fee of 5% of the accounts

Problem 8-12 (IAA) Lucid Company showed the following balances on Decembe 31: Accounts receivable-unassigned Accounts receivable-assigned Allowance for doubtful accounts-January 1 Receivable from factor Note payable-bank 1,000,000 300,000 30,000 40,000 240,000 During the current year, the entity found itself in financial distress and decided to resort to receivable financing. On June 30, the entity factored P200,000 of accounts receivable to a finance entity. The finance entity charged a factoring fee of 5% of the accounts factored and withheld 20% of the amount factored. On December 31, the entity assigned P300,000 of accounts receivable to a bank under a nonnotification basis. d 80% less a service fee of 5% of the accounts

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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Problem 7-4 (Bad Debt Reporting) From inception of operations to 31 December 2019, Fortner Corporation provided for uncollectible accounts receivable under the allowance method. The provisions were recorded based on analysis of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account; and no year-end adjustments to the allowance account were made. Fortner's usual credit terms are net 30 days. The balance in Allowance for Doubtful Accounts was $130,000 at 1 January 2019. During 2019, credit sales totalled $9,000,000, the provision for doubtful accounts was determined to be $180,000, $90,000 of bad debts were written off, and recoveries of accounts previously written off amounted to $15,000. Fortner installed a computer system in November 2019, and an aging of accounts receivable was prepared for the first time as of 31 December 2019. A summary of the…
Assume that accounts receivable and the allowance for doubtful accounts (AFDA )ending balances were RO400,000 debit and RO5000 credit balances respectively at December 31, and the uncollectible accounts is estimated to be 6% of accounts receivable. The adjusting entry to achieve the correct AFDA adjusted ending balance under percentage of accounts receivables method would be; a. None of the given options b. Dr Bad debt expenses A/C OMR 24000 and Cr Allowance for doubtful accounts A/C OMR 24000 c. Dr Bad debt expenses A/C OMR 19000 and Cr Allowance for doubtful accounts A/C OMR 19000 d. Dr Bad debt expenses A/C OMR 5000 and Cr Allowance for doubtful accounts A/C OMR 5000 Clear my choice
The accounts of Long Company provided the following 20X5 information at 31 December 20X5 (end of the annual period): Accounts receivable balance, 1 January 20X5 $51,000 Allowance for doubtful accounts balance, 1 January 20X5 3,000 Uncollectible account to be written off during 20X5 (ex-customer Slo) 1,000 Cash collected on accounts receivable during 20X5 170,000 Estimates for bad debt losses: Based on ending balance of accounts receivable, 8%. Based on aging schedule (excludes Slo’s account): Age Accounts Receivable Probability of Noncollection Less than 30 days $28,000 2% 31–90 days 7,000 10 91–120 days 3,000 30 More than 120 days 2,000 60 Required: Give the entry to write off customer Slo’s long-overdue account. Give all entries related to accounts receivable and the allowance account for the following two cases: Case A—Bad debt expense is based on the ending balance of accounts receivable Case B—Bad debt expense is based on aging Show how the results of applying each case above…
16. Int
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Subject: acounting
Brief Exercise 8-10 (Part Level Submission) During its first year of operations, Sandhill Co. had credit sales of $3,208,100, of which $434,300 remained uncollected at year-end. The credit manager estimates that $19,120 of these receivables will become uncollectible. (a) Prepare the journal entry to record the estimated uncollectibles. (Assume an unadjusted balance of zero in Allowance for Doubtful Accounts.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
8. Use the following information for the next two questions: Pampi's Co. has the following information. Days Outstanding Receivable Balances % collectible 0-60 480,000 1% 61-120 360,000 2% Over 120 400,000 6% During the year, Pampi wrote off P14,000 receivables and recovered 8,000 that had been written-off in prior years. The allowance for doubtful accounts has a beginning balance of P4,000. How much is the net realizable value of accounts receivable at year-end? How much is the doubtful accounts expense?
Qw.8.
! 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 $16,000. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable $ 820,000 Age of Accounts Receivable Not yet due Expected Percent Uncollectible 1.30% 328,000 1 to 30 days past due 2.05 65,600 31 to 60 days past due 6.55 32,800 13,120 61 to 90 days past due Over 90 days past due 33.00 69.00 2. Prepare the adjusting entry to record bad debts expense at December 31. Note: Round percentage answers to nearest whole percent. Do not round intermediate calculations.
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