S4-2 At December 31, 2020, before any year-end adjustments are made, White Corporation had a $50 balance in Accounts Receivable and a $0.6 debit balance in the Allowance for Uncollectible Accounts. Requirements 1. What is the normal balance in the Allowance for Uncollectible Accounts? What would cause this account to have a debit balance? 2. How does management determine the amount of uncollectible accounts? 3. The aging of receivables indicates that White Corporation will not collect $1.5 million of its accounts receivables. Prepare the journal entry to record the bad debt expense for 2020.

S4-2 At December 31, 2020, before any year-end adjustments are made, White Corporation had a $50 balance in Accounts Receivable and a $0.6 debit balance in the Allowance for Uncollectible Accounts. Requirements 1. What is the normal balance in the Allowance for Uncollectible Accounts? What would cause this account to have a debit balance? 2. How does management determine the amount of uncollectible accounts? 3. The aging of receivables indicates that White Corporation will not collect $1.5 million of its accounts receivables. Prepare the journal entry to record the bad debt expense for 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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

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+
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☆
S4-2 At December 31, 2020, before any year-end
adjustments are made, White Corporation had a $50 balance
in Accounts Receivable and a $0.6 debit balance in the
Allowance for Uncollectible Accounts.
Requirements
O
1. What is the normal balance in the Allowance for
Uncollectible Accounts? What would cause this
account to have a debit balance?
2. How does management determine the amount of
uncollectible accounts?
3. The aging of receivables indicates that White
Corporation will not collect $1.5 million of its
accounts receivables. Prepare the journal entry to
record the bad debt expense for 2020.
PUCE
a
209

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