Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's financial year-end. The 2012 statement of financial position disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $30,000 $432,000 During 2013, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. In addition, $3,000 was collected from a customer whose account was ad written off in 2012. A review of accounts receivable for uncollectible amounts at December 31, 2013, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year-End Receivables in Group 65% 20 10 5 Percent Uncollectible 4% 15 25 40 Required: sting 1. Prepare summary journal entries to account for the 2013 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts based on the review of accounts receivable for uncollectible amounts. 3. What is the net amount of accounts receivable reported in the 2013 statement of financial position?

Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's financial year-end. The 2012 statement of financial position disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $30,000 $432,000 During 2013, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. In addition, $3,000 was collected from a customer whose account was ad written off in 2012. A review of accounts receivable for uncollectible amounts at December 31, 2013, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year-End Receivables in Group 65% 20 10 5 Percent Uncollectible 4% 15 25 40 Required: sting 1. Prepare summary journal entries to account for the 2013 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts based on the review of accounts receivable for uncollectible amounts. 3. What is the net amount of accounts receivable reported in the 2013 statement of financial position?

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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