Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.50% of its annual credit sales of $770,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $385 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the transactions of December 31, February 1, and June 5. View transaction list Journal entry worksheet < 2 4 Wrote off P. Park's account as uncollectible. Note: Enter debits before credits. Date February 01 General Journal Debit Credit Record entry Clear entry View general journal > < Prev 10 of 10 Next >

Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.50% of its annual credit sales of $770,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $385 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the transactions of December 31, February 1, and June 5. View transaction list Journal entry worksheet < 2 4 Wrote off P. Park's account as uncollectible. Note: Enter debits before credits. Date February 01 General Journal Debit Credit Record entry Clear entry View general journal > < Prev 10 of 10 Next >

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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4. Tooele Company's controller estimated bad debt expense using the percentage of accounts receivable method. Total sales for the year were $500,000 of which 250,000 are on account. The ending balance in accounts receivable was $100,000. An examination of the outstanding accounts at the end of the year indicates that approximately 12 percent of these accounts will ultimately prove to be uncollectible. Before any adjusting entries, the balance in the Allowance for Doubtful Accounts is $700 (CREDIT). Which is part of the correct adjusting entry to record bad debt expense for the year? (The Allowance for Doubtful Accounts is also known as the Allowance for Bad Debts or the Allowance for Uncollectible Accounts.) a. CREDIT Allowance for Bad Debts for $11,300 b. DEBIT Allowance for Bad Debts for $11,300 c. CREDIT Allowance for Bad Debts for $12,000 d. CREDIT Allowance for Bad Debts for $12,700 e. DEBIT Allowance for Bad Debts for $14,700
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 fiscal year-end. The 2023 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $50,000 During 2024, credit sales were $1,850,000, cash collections from customers $1,930,000, and $59,000 in accounts receivable were written off. In addition, $5,000 was collected from a customer whose account was written off in 2023. An aging of accounts receivable at December 31, 2024, 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% 15 15 5 Percent Uncollectible 4% 10 30 50 $ 532,000 Required: 1. Prepare summary journal entries to account for the 2024 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the…
At year-end December 31, Chan Company estimates its bad debts as 0.30% of its annual credit sales of $812, 000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $406 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the transactions of December 31, February 1, and June 5. Journal entry worksheet Record the estimated bad debts expense. Note: Enter debits before credits. Please explain and elaborate!
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 fiscal year-end. The 2023 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $36,000 $ 462,000 During 2024, credit sales were $1,780,000, cash collections from customers $1,860,000, and $41,000 in accounts receivable were written off. In addition, $3,600 was collected from a customer whose account was written off in 2023. An aging of accounts receivable at December 31, 2024, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Percentage of Year- End Receivables in Group Percent Uncollectible 70% 20 5% 15 5 20 5 40 Over 120 days Required: 1. Prepare summary journal entries to account for the 2024 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the…
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, theallowance account had a credit balance of $75,000. Credit sales for 2018 totaled $2,400,000 and the year-endaccounts receivable balance was $490,000. During this year, $73,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal yearends on December 31.Required:1. Does this situation describe a loss contingency? Explain.2. What is the bad debt expense that Manda Panda should report in its 2018 income statement?3. Prepare the appropriate journal entry to record the contingency.4. What is the net accounts receivable value Manda Panda should report in its 2018 balance sheet?
Crane Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that 3% of accounts receivable will become uncollectible. Accounts receivable are $549,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $1,880. (a) Prepare the adjusting journal entry to record bad debt expense for the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Credit (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
! Required information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.30% of its annual credit sales of $812,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $406 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Determine the impact of the December 31, February 1, and June 5 transactions on the accounting equation. For each transaction, indicate whether there would be an increase, decrease, or no effect, for Assets, Liabilities, and Equity. Note: Leave no cells blank. December 31 February 1 June 5 Assets Liabilities Equity
During the current year, Sun Electronics, Incorporated, recorded credit sales of $760,000. Based on prior experience, it estimates a 1 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $430 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. Required: Indicate the effects of the transactions in the following table. Indicate the accounts affected and enter decreases to account categories with a minus sign. Transaction a. a. b. b. Assets Liabilities Stockholders' Equity
Oriole Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivable will become uncollectible. Accounts receivable are $ 620,000 at the end of the year, and the allowance for doubtful accounts has a credit balance of $ 3,320. (a) V Your answer is correct Prepare the adjusting journal entry to record bad debt expense for the year. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Bad Debt Expense 9080 Allowance for Doubtful Accounts 9080 eTextbook and Media List of Accounts Attempts: 2 of 3 used (b) Your answer is partially correct. If the allowance for doubtful accounts had a debit balance of $ 800 instead of a credit balance of $ 3,320, prepare the adjusting journal entry for bad debt expense. (Credit account titles are automatically…
The annual report for Fabeck Finishing Corporation contained the following information: (in millions) Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net 2021 $673 32 $641 Assume that accounts receivable write-offs amounted to $13 during 2021 and $3 during 2020, and that Fabeck Finishing did not record any recoveries. Bad Debt Expense 2020 $735 31 $704 Required: Determine the Bad Debt Expense for 2021 based on the above facts. (Enter your answer in millions.) million
Required Information [The following information applies to the questions displayed below.] At year-end December 31, Chan Company estimates its bad debts as 0.70% of its annual credit sales of $851,000. Chan records its bad debts expense for that estimate. On the following February 1, Chan decides that the $426 account of P. Park is uncollectible and writes it off as a bad debt. On June 5. Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries to record the transactions of December 31, February 1, and June 5. View transaction list Journal entry worksheet 1 2 3 4 Record the estimated bad debts expense. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal
Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $8,700 of its accounts receivable from Leer Company. March 29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions.