SCENARIO #1 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2019, what is the company's net realizable value? 12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For end of 2020, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2020, what is the company's net realizable value?

SCENARIO #1 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2019, what is the company's net realizable value? 12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For end of 2020, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2020, what is the company's net realizable value?

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

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SCENARIO #1
12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000.
Yolandi's management has estimated that 1.5% of sales will be uncollectible.
For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts:
Bad debt expense
Allowance for doubtful accounts
For the end of 2019, what is the
company's net realizable value?
12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company
had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that 1.5% of sales will be
uncollectible.
For the end of 2020, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts:
Bad debt expense
Allowance for doubtful accounts
For the end of 2020, what is the
company's net realizable value?

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