Required (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2023. (b) Show the statement of financial position presentation of accounts receivable on December 31, 2023: (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $4,000. Make the appropriate entry to record the write-off of the Shard account. Also show the statement of financial position presentation of accounts receivable before and after the write-off.

Required (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2023. (b) Show the statement of financial position presentation of accounts receivable on December 31, 2023: (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $4,000. Make the appropriate entry to record the write-off of the Shard account. Also show the statement of financial position presentation of accounts receivable before and after the write-off.

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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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

3. Grump Computer has credit sales of $400,000 in 2023 and a debit balance of $300 in the Allowance for
Doubtful Accounts at year end. As of December 31, 2023, $120,000 of accounts receivable remain
uncollected. The credit manager of Grump prepared an aging schedule of accounts receivable and
estimates that $5,200 will prove to be uncollectible.
On March 4, 2024 the credit manager authorizes a write-off of the $1,000 balance owed by A. Shard.
Required
(a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2023.
(b) Show the statement of financial position presentation of accounts receivable on December 31, 2023:
(c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000
and the balance of Allowance for Doubtful Accounts is a credit of $4,000. Make the appropriate
entry to record the write-off of the Shard account. Also show the statement of financial position
presentation of accounts receivable before and after the write-off.

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Step 1: Define Accounting related to allowance for uncollectable debts

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Step 2: Prepare journal entry to record allowance for uncollectible accounts

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Step 3: Present Accounts receivable in financial position/financial statement

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Step 4: Journal entry to record write off & Accounts receivable in financial position after write off

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