Required: a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.) b. As the result of a comprehensive analysis, it is determined that the December 31, 2022, balance of the Allowance for Bad Debts account should be $14,200. Show the adjustment required in the journal entry format. c. During a conversation with the credit manager, one of Tabor's sales representatives learns that a $1,275 receivable from a bankrupt customer has not been written off but was considered in the determination of the appropriate year-end balance of the Allowance for Bad Debts account balance. What is the effect of write-off on 2022 net income?
Required: a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts account.) b. As the result of a comprehensive analysis, it is determined that the December 31, 2022, balance of the Allowance for Bad Debts account should be $14,200. Show the adjustment required in the journal entry format. c. During a conversation with the credit manager, one of Tabor's sales representatives learns that a $1,275 receivable from a bankrupt customer has not been written off but was considered in the determination of the appropriate year-end balance of the Allowance for Bad Debts account balance. What is the effect of write-off on 2022 net income?
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
Ef 570.
Transcribed Image Text:Exercise 5-13 (Static) Bad debts analysis-Allowance
account LO 5-5
On January 1, 2022, the balance in Tabor Company's Allowance for Bad Debts account was $21,600. During the first 11 months of the
year, bad debts expense of $24,910 was recognized. The balance in the Allowance for Bad Debts account at November 30, 2022, was
$17,440.
Required:
a. What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad Debts
account.)
b. As the result of a comprehensive analysis, it is determined that the December 31, 2022, balance of the Allowance for Bad Debts
account should be $14,200. Show the adjustment required in the journal entry format.
c. During a conversation with the credit manager, one of Tabor's sales representatives learns that a $1,275 receivable from a bankrupt
customer has not been written off but was considered in the determination of the appropriate year-end balance of the Allowance
for Bad Debts account balance. What is the effect of write-off on 2022 net income?
Complete this question by entering your answers in the tabs below.
Required A Required B
Required C
What was the total of accounts written off during the first 11 months? (Hint: Make a T-account for the Allowance for Bad
Debts account.)
Bad debts write-off
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