The following are a series of unrelated situations.Answer the questions relating to each of the five independent situations as requested.1. Sage Company’s unadjusted trial balance at December 31, 2020, included the following accounts. Debit CreditAccounts receivable $53,700 Allowance for doubtful accounts 4,640 Net sales $1,227,300Sage Company estimates uncollectible accounts will be 8% of gross accounts receivable. Determine its bad debt expense for 2020. Bad debt expense for 2020 $ 2. An analysis and aging of Pronghorn Corp. accounts receivable at December 31, 2020, disclosed the following.Amounts estimated to be uncollectible $ 184,460Accounts receivable 1,758,700Allowance for doubtful accounts (per books) 127,940What is the net amount expected to be collected of Pronghorn’s receivables at December 31, 2020?Net realizable value $ 3. Stellar Co. provides for doubtful accounts based on 3% of gross accounts receivable, The following data are available for 2020.Credit sales during 2020 $3,603,000Bad debt expense 57,750Allowance for doubtful accounts 1/1/20 15,810Collection of accounts written off in prior years (customer credit was reestablished) 8,350Customer accounts written off as uncollectible during 2020 27,120What is the balance in Allowance for Doubtful Accounts at December 31, 2020?Allowance for doubtful accounts 12/31/20 $ 4. At the end of its first year of operations, December 31, 2020, Pearl Inc. reported the following information.Accounts receivable, net of allowance for doubtful accounts $927,300Customer accounts written off as uncollectible during 2020 21,750Bad debt expense for 2020 82,370What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?Accounts receivable, before deducting allowance for doubtful accounts $ 5. The following accounts were taken from Martinez Inc.’s trial balance at December 31, 2020. Debit CreditNet credit sales $719,000Allowance for doubtful accounts $12,850 Accounts receivable 331,100 If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2020.Bad debt expense, as adjusted $ Click if you would like to Show Work for this question:Open Show Work

Answered: The following are a series of unrelated…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The following are a series of unrelated situations.

Answer the questions relating to each of the five independent situations as requested.

1. Sage Company’s unadjusted trial balance at December 31, 2020, included the following accounts.

	Debit	Credit
Accounts receivable	$53,700
Allowance for doubtful accounts	4,640
Net sales		$1,227,300

Sage Company estimates uncollectible accounts will be 8% of gross accounts receivable. Determine its bad debt expense for 2020.

Bad debt expense for 2020

2. An analysis and aging of Pronghorn Corp. accounts receivable at December 31, 2020, disclosed the following.

Amounts estimated to be uncollectible		$ 184,460
Accounts receivable		1,758,700
Allowance for doubtful accounts (per books)		127,940

What is the net amount expected to be collected of Pronghorn’s receivables at December 31, 2020?

Net realizable value

3. Stellar Co. provides for doubtful accounts based on 3% of gross accounts receivable, The following data are available for 2020.

Credit sales during 2020		$3,603,000
Bad debt expense		57,750
Allowance for doubtful accounts 1/1/20		15,810
Collection of accounts written off in prior years (customer credit was reestablished)		8,350
Customer accounts written off as uncollectible during 2020		27,120

What is the balance in Allowance for Doubtful Accounts at December 31, 2020?

Allowance for doubtful accounts 12/31/20

4. At the end of its first year of operations, December 31, 2020, Pearl Inc. reported the following information.

Accounts receivable, net of allowance for doubtful accounts		$927,300
Customer accounts written off as uncollectible during 2020		21,750
Bad debt expense for 2020		82,370

What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?

Accounts receivable, before deducting allowance for doubtful accounts

5. The following accounts were taken from Martinez Inc.’s trial balance at December 31, 2020.

	Debit	Credit
Net credit sales		$719,000
Allowance for doubtful accounts	$12,850
Accounts receivable	331,100

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2020.

Bad debt expense, as adjusted

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The following are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Sage Company’s unadjusted trial balance at December 31, 2020, included the following accounts.