Question No 4: Moonglow, a Broadway Publicity firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end an aging of the accounts receivable produced the following classification: Not yet due 1-30 days past due. 31-60 days past due. 61-90 days past due. Over 90 days past due Total . $400,000 150,000 60,000 20,000 50,000 $680.000 On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age groups to be as follows: Group 1, 1%; Group 2, 4%; Group 3, 10%; Group 4, 25%; and Group 5, 40% The Allowance for Doubtful Accounts before adjustments at December 31 showed a credit balance of $6,600. Instructions a. Compute the estimated amount of uncollectible accounts based on the above classification by age groups. b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount. Show T- account calculation. c. Assume that on January 15 of the following year, Moonglow learned that an account receivable that had originated on September 1 in the amount of $2,400 was worthless because of the bankruptcy of the client, May Flowers. Prepare the journal entry required on January 15 to write off this account.

Question No 4: Moonglow, a Broadway Publicity firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end an aging of the accounts receivable produced the following classification: Not yet due 1-30 days past due. 31-60 days past due. 61-90 days past due. Over 90 days past due Total . $400,000 150,000 60,000 20,000 50,000 $680.000 On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age groups to be as follows: Group 1, 1%; Group 2, 4%; Group 3, 10%; Group 4, 25%; and Group 5, 40% The Allowance for Doubtful Accounts before adjustments at December 31 showed a credit balance of $6,600. Instructions a. Compute the estimated amount of uncollectible accounts based on the above classification by age groups. b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount. Show T- account calculation. c. Assume that on January 15 of the following year, Moonglow learned that an account receivable that had originated on September 1 in the amount of $2,400 was worthless because of the bankruptcy of the client, May Flowers. Prepare the journal entry required on January 15 to write off this account.

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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d. The company collects Y5,000 subsequently on a specific account that had previously been determined to be uncollectible in (c.). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.
SCENARIO #2 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. Yolandi's management has estimated that $9,000 in accounts receivable would be uncollectible (use the aging method). For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2019, what is the company's net realizable value? 12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that S17,000 in accounts receivable would be uncollectible (use the aging method). Bad debt expense Allowance for doubtful accounts For the end of 2020, what is the company's net realizable value?
d) Golden Music Company uses the allowance method to estimate uncollectible accounts receivable. An aging of the accounts receivable revealed the following: Estimated Percentage Uncollectible Current Accounts $17,000 $1,500 $1,200 $500 $900 $21,100 1% 1-30 days past due 31–60 days past due 61–90 days past due Over 90 days past due Total Accounts Receivable 3% 6% 12% 25% On 31 December 2021, the company has found out that a customer went bankrupt and management agreed that the accounts receivable of $900 included above which is past due for over 90 days can be written off. i) Compute the total estimated uncollectible accounts receivable as at 31 December 2021. ii) Prepare the journal entry year-end to write off the accounts receivable of $900 and the adjusting journal entry to record the bad debts for the year ended 31 December 2021.
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Vishal
6 Mario Company's Accounts Receivable balance atDecember 31 was $300,000 and there was a credit balance of $1,400 in the Alowance for Doubtful Accounts, The year's sales were $1,800,000. Mario estimates credit losses for the year at 1.5% of sales. After the appropriate adjusting entry is made for credit losses, what is the net amount of accounts receivable included in the current assets at year- end? A) $300,000 B) $271,600 C) $325,400 D) $277,400
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $400,000; Allowance for Doubtful Accounts has a debit balance of $3,500; and sales for the year total $1,800,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $15,800. a. Determine the amount of the adjusting entry for uncollectible accounts.$fill in the blank 1 b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $fill in the blank 2 Allowance for Doubtful Accounts $fill in the blank 3 Bad Debt Expense $fill in the blank 4 c. Determine the net realizable value of accounts receivable.
2 Nissan Inc. prepared an aging of its accounts receivable at December 31,2020 and determined that the net realizable value of the receivables was P250,000. Additional information is available as follows: Allowance for Bad Debts, 12/31/19 - debit balance Accounts written off as uncollectible during 2020 Accounts Receivable at 12/31/20 adjusted Uncollectible accounts recovery during 2020 What is amount of bad debts expense that shall be presented in Nissan's 2020 statement of financial performance? P 28,000 23,000 270,000 5,000
Haresh
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Hardev