Route Canal Shipping Company has the following schedule for aging of accounts receivable:Age of ReceivablesApril 30, 20X1(3)(2)Age ofAccount0-3031-6061-9091-120(1)Month ofSalesAprilMarchFebruaryJanuaryTotal receivablesMonth of SalesAprilMarcha. Calculate the percentage of amount due for each month.FebruaryJanuaryAmounts$120,54086,100103,32034,440$344,400Total receivablesPercent ofAmount Due%%%do(4)Percent ofAmount Due%100 %100% b. If the firm had $1,476,000 in credit sales over the four-month period, compute the average collection period. Average dailycredit sales should be based on a 120-day period.Average collection periodc. If the firm likes to see its bills collected in 33 days, should it be satisfied with the average collection period?YesNodaysd. Disregarding your answer to part c and considering the aging schedule for accounts receivable, should the company besatisfied?YesNo

Accounts receivable aging is a periodic report that categorizes a company's accounts receivable…

Answered: Route Canal Shipping Company has the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Analysis of Receivables Method At the end of the current year, Accounts Recelvable has a balance of $465,000; Allowance for Doubtful Accounts has a debit balance of $4,000; and sales for the year total $2,090,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $18,400. a. Determine the amount of the adjusting entry for uncollectible accounts. b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense C. Determine the net realizable value of accounts receivable.
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $630,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,840,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $25,400. a. Determine the amount of the adjusting entry for uncollectible accounts. 22,900 X b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense c. Determine the net realizable value of accounts receivable. 601,200 X Feedback 630,000 ✓ 28,400 X 22,900 X Check My Work The analysis of receivables method is based on the assumption that the longer an account receivable is outstanding the less likely that it will be collected. The amount of the adjusting entry is the amount that will yield an adjusted balance for Allowance for Doubtful Accounts.
Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of $675,000; Allowance for Doubtful Accounts has a debit balance of $6,000; and sales for the year total $3,040,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $21,600. a. Determine the amount of the adjusting entry for uncollectible accounts.$ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful Accounts $ Bad Debt Expense $ c. Determine the net realizable value of accounts receivable.$
Adjustment for Uncollectible Accounts Below is the aging of receivables schedule for Evers Industries. Aging-of-Receivables ScheduleNovember 30 Customer Balance Not Past Due 1-30Days Past Due 31-60Days Past Due 61-90Days Past Due Over 90Days Past Due Subtotals 674,900 398,200 148,500 60,700 33,700 33,800 Boyd Industries 17,300 17,300 Hodges Company 18,700 18,700 Kent Creek Inc. 9,300 9,300 Lockwood Company 9,000 9,000 Van Epps Company 25,600 25,600 Totals 754,800 423,800 157,500 70,000 52,400 51,100 Percentage uncollectible 2% 6% 20% 30% 45% Allowance for Doubtful Accounts 70,641 8,476 9,450 14,000 15,720 22,995 Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $ 14,835 before adjustment on November 30. Journalize the adjusting entry for uncollectible accounts as of November 30.
Selected data for the Erdin Corporation for the year ended Decmeber 31, 20x5 is provided below: Credit sales Accounts receivable written off Recoveries of previously written of accounts receivable Allowance for doubtful accounts balance, January 1, 20x5 Accounts receivable, December 31, 20x5 Erdin estimates that 0.8% of sales will be uncollectible. Required - $4,500,000 36,500 1,800 33,000 cr. 625,000 Write the journal entries to record the accounts receivable written off, the recoveries and the bad debt expense. Calculate the ending balance in the allowance for doubtful account at December 31, 20x5. Note that the accounts receivable and recoveries have been accounted for in the ending Accounts Receivable balance.
A trial balance before adjustment included the following: Accounts receivable Allowance for doubtful accounts Sales revenue Sales returns and allowances Debit $140,000 Credit $ 730 610,000 8,000 Estimates of uncollectible accounts are expected to be 5% of gross accounts receivable Use the information above to determine the following: 1) Net sales (on the income statement for the period)? 2) Accounts receivable (on the balance sheet at the end of the period)? 3) Bad debt expense? 4) Allowance for doubtful accounts had a credit balance of $5,500 at the beginning of the period. What amount of receivables was written off during the period? 5) If an additional $500 of receivables were written off during the period, what would bad debt expense have been?
Answer
Below are amounts (in millions) from three companies' annual reports. Beginning Ending Accounts Accounts Receivable Receivable Net Sales $1,715 5,666 529 WalCo TarMart CostGet Required: 1. Calculate the receivables turnover ratio and the average collection period for WalCo, TarMart and CostGet $2,662 $312,427 6,194 57,878 565 58,963
Daley Company prepared the following aging of receivables analysis at December 31. Total 0 Accounts receivable Percent uncollectible $ 625,000 $ 407,000 1 to 30 $ 101,000 Days Past Due 31 to 60 $ 47,000 61 to 90 $ 29,000 Over 90 $ 41,000 3% 4% 7% 9% 12% a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,100 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2,100 debit. Answer is not complete. Complete this question by entering your answers in the tabs below. Req A Req B and C Estimate the balance of the Allowance for Doubtful Accounts assuming the company…
Required information Use the following information for the Exercises below. Skip to question [The following information applies to the questions displayed below.]Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 625,000 $ 407,000 $ 101,000 $ 47,000 $ 29,000 $ 41,000 Percent uncollectible 3 % 4 % 7 % 9 % 12 % Exercise 9-9 Percent of receivables method LO P3 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,100 credit.c. Prepare the adjusting entry to record bad debts expense…
Required information [The following information applies to the questions displayed below.] Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due 31 to 60 $ 56,000 7% Accounts receivable Percent uncollectible Total 0 $ 670,000 $ 416,000 Req A Req B and C 3% Complete this question by entering your answers in the tabs below. 1 to 30 $ 110,000 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $14,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $3,000 debit. Estimated balance of allowance for uncollectibles 4%
A summary of Milan Fashion's December 31, 2021, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: Age Group Amount % 0-60 days $40,000 0.5 61-90 days 15,000 1.5 91-120 days 2,000 15.0 Over 120 days 800 80.0 The allowance for uncollectible accounts had a credit balance of $1,600 at January 1, 2021. During the year bad debts of $1,150 were written off. Also, $150 previously written off were paid by a customer. Required: Prepare all 2021 journal entries with respect to bad debts and the allowance for uncollectible accounts. Show computations. Prepare a T account for the allowance for uncollectible accounts from 1/1 to 12/31/21.

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