The following are the receivables balances of Hendrix Company as of January 1, 2021 (the beginning of the fiscal year). Notes receivable $ 85,000 331,750 Accounts receivable Allowance for doubtful accounts Transactions during 2021 include the following: 1) Sales to customers of $2,017,800 were made during 2021. Customers have 60 days to pay for the product. 2) Accounts receivable of $1,942,000 were collected. 3) $7,000 was received in payment of an account which was written off the books as uncollectible during 2021. 4) Customer accounts of $30,200 were written off during 2021. 5) At year-end (December 31, 2021), an aging of the accounts receivable balance showed the following. Use the below information to record bad debt expense for 2021. Age Under 30 days 30-90 days 91-180 days 181-360 days Over 360 days Amount $169,250 100,000 16,700 (Credit balance) 55,900 38,200 14,000 Estimated % Uncollectible 0.8% 1.6 5.0 15.0 40.0 Instructions a) Prepare the necessary journal entries for the 2021 transactions in Items #1-5. b) Prepare the Receivables section of Hendrix's balance sheet as of December 31, 2021.

The following are the receivables balances of Hendrix Company as of January 1, 2021 (the beginning of the fiscal year). Notes receivable $ 85,000 331,750 Accounts receivable Allowance for doubtful accounts Transactions during 2021 include the following: 1) Sales to customers of $2,017,800 were made during 2021. Customers have 60 days to pay for the product. 2) Accounts receivable of $1,942,000 were collected. 3) $7,000 was received in payment of an account which was written off the books as uncollectible during 2021. 4) Customer accounts of $30,200 were written off during 2021. 5) At year-end (December 31, 2021), an aging of the accounts receivable balance showed the following. Use the below information to record bad debt expense for 2021. Age Under 30 days 30-90 days 91-180 days 181-360 days Over 360 days Amount $169,250 100,000 16,700 (Credit balance) 55,900 38,200 14,000 Estimated % Uncollectible 0.8% 1.6 5.0 15.0 40.0 Instructions a) Prepare the necessary journal entries for the 2021 transactions in Items #1-5. b) Prepare the Receivables section of Hendrix's balance sheet as of December 31, 2021.

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

The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, theallowance account had a credit balance of $75,000. Credit sales for 2018 totaled $2,400,000 and the year-endaccounts receivable balance was $490,000. During this year, $73,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal yearends on December 31.Required:1. Does this situation describe a loss contingency? Explain.2. What is the bad debt expense that Manda Panda should report in its 2018 income statement?3. Prepare the appropriate journal entry to record the contingency.4. What is the net accounts receivable value Manda Panda should report in its 2018 balance sheet?
On December 31, 2022, Ace Hardware reported the following information on its balance sheet: Accounts Receivable $1,350,000 Allowance for Doubtful Accounts (credit) 81,000 During 2023, the Company had the following transactions related to receivables: Sales on Account Collections on Account Write-offs of uncollectible accounts Recovery of previously written off accounts If bad debts are estimated to be 1.50% of credit sales, determine the ending balance in the Allowance for Doubtful Accounts after adjustment, at the end of 2023: Select one: O $4,500,000 4,275,000 90,000 18,000 a. $67,500 b. $94,500 c. $58,500 d. $76,500 e. $74,250
The statement of financial position of Larkspur Inc. at December 31, 2022, includes the following: Notes receivable Accounts receivable Less: Allowance for expected credit losses Transactions in 2023 include the following: 2. 3. $380,000 4. 282,700 1. Accounts receivable of $144,500 were collected. Customer accounts of $40,400 were written off during the year. In December, an additional $16,200 was received in payment of an account that was written off early in 2023. At year end, Allowance for Expected Credit Losses was estimated to need a balance of $52,400. This estimate is based on an analysis of aged accounts receivable. (47,200) $615,500
On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:Accounts Debit CreditCash $ 25,100Accounts Receivable 46,200Allowance for Uncollectible Accounts $ 4,200Inventory 20,000Land 46,000Equipment 15,000Accumulated Depreciation 1,500Accounts Payable 28,500Notes Payable (6%, due April 1, 2022) 50,000Common Stock 35,000Retained Earnings…
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2021, the allowance account had a credit balance of $75,000. Credit sales for 2021 totaled $2,400,000 and the year-end accounts receivable balance was $490,000. During this year, $73,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31.Required:1. Does this situation describe a loss contingency? Explain.2. What is the bad debt expense that Manda Panda should report in its 2021 income statement?3. Prepare the appropriate journal entry to record the contingency.4. What is the net accounts receivable value Manda Panda should report in its 2021 balance sheet?
Company I had the following balances at the end of the year: Accounts receivable: $50,000 Allowance for doubtful accounts: $2,000 (credit balance) The company estimates that 2% of accounts receivable will be uncollectible. Record the journal entry to adjust the allowance for doubtful accounts.
During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $120,000, of which $60,000 was on credit. At the start of 2021, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $500 credit balance. Collections of accounts receivable during 2021 amounted to $58,000. Data during 2021 follow: a. On December 10, a customer balance of $1,000 from a prior year was determined to be uncollectible, so it was written off. b. On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. Required: 1. Give the required journal entries for the two events in December. 2-a. Show how the amounts related to Bad Debt Expense would be reported on the income statement. 2-b. Show how the amounts related to Accounts Receivable would be reported on the balance sheet. 3. On the basis of the data available, does the 2 percent rate appear to be reasonable?
The year-end financial statements of Prize Inc. include the accounts receivable footnote:Total accounts and other receivables at December 31 consisted of the following: (in millions) Year 2 Year 1 Total accounts and other receivables $444.4 $476.6 Allowance for doubtful accounts (6.0) (8.4) Total accounts and other receivables, net $438.4 $468.2 The balance sheet reports total assets of $2,984.1 million at December 31, Year 2.The common-size amount for gross accounts and other receivables are: Select one: a. $444.4 million b. None of these are correct. c. 14.7% d. 14.9% e. $438.4 million
The following information relates to a company’s accounts receivable: accounts receivable balance at the beginning of the year, $360,000: allowance for uncollectible accounts at the beginning, $30,000, credit sales during the year, $1,800,000; accounts receivable written off during the year $19,200; cash collections from customers; $1,740,000. the company estimates that the required year-end balance in the allowance for uncollectible accounts should be $40,080. What is the year-end gross and net accounts receivable balance?
Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $239,000 of services on account. In 2021, the company wrote off uncollectible accounts of $9,600. By the end of 2021, cash collections on accounts receivable totaled $201,600. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible. Required:1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021?
Hogenson Company estimates bad debt expense at 0.60% of credit sales. The company reported accounts receivable and allowance for uncollectible accounts of $481,000 and $1,480 respectively on December 31, 2018. During 2019, Hogenson Company's credit sales and collections were $325,000 and $316,000, respectively, and $1,870 in accounts receivable were written off. Determine the company’s net realizable value of accounts receivable on December 31, 2019. A. $488,440.B. $484,700.C. $486,570. D. $469,020.
At January 1, 2024, ABC Company reported an allowance for bad debts with a $7,190 credit balance. During 2024, ABC wrote-off as uncollectible accounts receivable totaling $12,530. At December 31, 2024, ABC Company had accounts receivable totaling $325,000 and prepared the following aging schedule: Accounts Receivable not past due 1-39 days past due 40-79 days past due 80-119 days past due over 119 days past due total $167,000 $ 52,000 $ 69,000 $ 26,000 $ 11,000 $325,000 % Uncollectible 2% 8% 14% 22% 45% Calculate the net realizable value of ABC Company's accounts receivable at December 31, 2024.