Part 2 During August, total sales of $1,013,000 were recorded, all on credit. Sales returns and allowances totalled $17,000. Collections during the month were $863,000, which included the recovery of $2,000 from a customer account written off in a previous month. No accounts were written off during August. Tippleton Company changed its method of estimating bad debts to the balance sheet approach because the new accountant said it more accurately reflected uncollectible accounts. The resulting aging analysis determined the total estimated uncollectible accounts at August 31 to be $15,000. Required: Prepare the August 31 adjusting entry to record estimated bad debts for August. View transaction list Journal entry worksheet < 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date Aug 31 General Journal Debit Credit

Part 2 During August, total sales of $1,013,000 were recorded, all on credit. Sales returns and allowances totalled $17,000. Collections during the month were $863,000, which included the recovery of $2,000 from a customer account written off in a previous month. No accounts were written off during August. Tippleton Company changed its method of estimating bad debts to the balance sheet approach because the new accountant said it more accurately reflected uncollectible accounts. The resulting aging analysis determined the total estimated uncollectible accounts at August 31 to be $15,000. Required: Prepare the August 31 adjusting entry to record estimated bad debts for August. View transaction list Journal entry worksheet < 1 Record the estimate for uncollectible accounts. Note: Enter debits before credits. Date Aug 31 General Journal Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Required information [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $ 280,000 $ 700,000 In addition, its unadjusted trial balance includes the following items. $ 210,000 debit $ 2,500 debit Accounts receivable Allowance for doubtful accounts 2. Bad debts are estimated to be 2% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet. Current assets: $ 0
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
During Burns Company's first year of operations, credit sales totaled $178,000 and collections on credit sales totaled $124,000. Burns estimates that bad debt losses will be 2.0% of credit sales. By year-end, Burns had written off $490 of specific accounts as uncollectible. Required: 1. Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. 2. Show the year-end balance sheet presentation for accounts receivable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 Record the entry to write-off specific accounts. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal >
Data for the year ended December 31 are presented below. Sales (100% on credit) $2,100,000 Sales returns 150,000 Accounts Receivable (December 31) 420,000 Allowance for Doubtful Accounts (Before adjustment at December 31) 25,000 Estimated amount of uncollected accounts based on an aging analysis 75,000 If the company uses the aging of accounts receivable method to estimate its bad debts, what will be the net realizable value of its accounts receivable after the adjustment for bad debt expense?
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
At the end of the current year, the accounts receivable account has a debit balance of $1,117,000 and sales for the year total $12,670,000. a. The allowance account before adjustment has a credit balance of $15,100. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a credit balance of $15,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $48,300. c. The allowance account before adjustment has a debit balance of $6,400. Bad debt expense is estimated at 1/4 of 1% of sales. d. The allowance account before adjustment has a debit balance of $6,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $53,100. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. b. $ C. $ d. $
Gregg company uses the allowance method for recording its expected credit losses. It estimates credit losses at 3% of credit sales, which were $900,000 during the year. On December 31 the accounts receivable balance was 150,000, and the allowance for doubtful accounts had a credit balance of 12,200 before adjustment. A. Prepare the adjusting entry to record the credit losses for the year. B. Show how accounts receivable and the allowance for doubtful accounts would appear in the December 31 balance sheet. The top 2 shaded blanks have the options of Bad debts expense, allowance for doubtful accounts. The bottom 2 shaded blanks have the options of accounts receivable, less: allowance for doubtful accounts.
2. D’Costa Company uses the allowance method of handling credit losses. It estimates losses at 2% of credit sales, which were $1,800,000 this year. At December 31 of this year, the Accounts Receivable balance is $270,000, and the Allowance for Doubtful Accounts has a $3,600 credit balance before adjustment. a. Give the adjusting entry to record bad debts expense for this year. b. What net amount of accounts receivable would appear on the December 31 balance sheet this year? c. Assume that D’Costa Company uses aged accounts receivable as a basis of estimating credit losses, instead of a percent of credit sales. If the firm estimates that $22,800 of the accounts will prove uncollectible, what adjusting entry would D’Costa Company make to record the bad debts expense for this year?
Keel Company's December 31 balances from the prior year related to accounts receivable follow. Accounts receivable (Dr.) Allowance for doubtful accounts (Cr.) $500,000 10,000 During the current year, $15,000 of accounts receivable is considered uncollectible, and no more effort to collect these accounts will be made. Total sales for the current year are $2,000,000, of which $400,000 are cash sales. A total of $1,500,000 cash was collected during the current year from sales that were originally made on account. Required a. Assuming that Keel applies the allowance method to estimate net accounts receivable and uses 10% of accounts receivable as its estimate of expected credit losses, prepare the disclosure on gross and net accounts receivable on the balance sheet at December 31 of the current year. • Note: Do not use negative signs in your answers. Balance Sheet, December 31 Accounts receivable Less: Allowance for doubtful accounts Accounts receivable, net 0
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,132,000 and sales for the year total $12,840,000. The allowance account before adjustment has a credit balance of $15,300. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a credit balance of $15,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $49,000. The allowance account before adjustment has a debit balance of $9,200. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $9,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $76,400. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.
Innovative Tech Inc. (ITI) uses the percentage of credit sales method to estimate bad debts eachmonth and then uses the aging method at year-end. During November, ITI sold services on accountfor $100,000 and estimated that ½ of one percent of those sales would be uncollectible. At itsDecember 31 year-end, total Accounts Receivable is $89,000, aged as follows: (1) 1–30 days old,$75,000; (2) 31–90 days old, $10,000; and (3) more than 90 days old, $4,000. Experience hasshown that for each age group, the average rate of uncollectibility is (1) 10 percent, (2) 20 percent,and (3) 40 percent, respectively. Before the end-of-year adjusting entry is made, the Allowance forDoubtful Accounts has a $1,600 credit balance at December 31.Required:1. Prepare the November adjusting entry for bad debts.2. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts.3. Prepare the December 31 adjusting entry.4. Show how the various accounts related to accounts…
Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 Sold $1,346,100 of merchandise on credit (that had cost $983,000), terms n/30. Wrote off $21,100 of uncollectible accounts receivable. Received $673,300 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Year 2 Sold $1,577,400 of merchandise (that had cost $1,329,500) on credit, terms n/30. Wrote off $25,000 of uncollectible accounts receivable. Received $1,122,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.80% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end…