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The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm's fiscal year on December 31, 20X1: LUCERO COMPANY Schedule of Accounts Receivable by Age December 31, 20X1 Past Due-Days Account Balance Current 1-30 31-60 Over 60 Adson, Paul Allen, Alfred Ash, John Bae, John Barker, Kelsie Bentley, Maggie Blair, Herman (All other accts.) %$4 650.00 $ 650.00 600.00 %24 500.00 $ 100.00 316.00 316.00 360.00 360.00 104.00 74.00 30.00 340.00 120.00 150.00 70.00 76.00 54.00 22.00 49,754.00 40,796 4,320.00 2,776.00 1,862.00 Totals $52, 200.00 $ 42,000.00 $5,000.00 $3,00e.00 $2,200.00 Required: 1. Compute the estimated uncollectible accounts at the end of the year using the following rates: Current 3% 1-30 days past due 31-60 days past due Over 60 days past due 5% 8% 20%

The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm's fiscal year on December 31, 20X1: LUCERO COMPANY Schedule of Accounts Receivable by Age December 31, 20X1 Past Due-Days Account Balance Current 1-30 31-60 Over 60 Adson, Paul Allen, Alfred Ash, John Bae, John Barker, Kelsie Bentley, Maggie Blair, Herman (All other accts.) %$4 650.00 $ 650.00 600.00 %24 500.00 $ 100.00 316.00 316.00 360.00 360.00 104.00 74.00 30.00 340.00 120.00 150.00 70.00 76.00 54.00 22.00 49,754.00 40,796 4,320.00 2,776.00 1,862.00 Totals $52, 200.00 $ 42,000.00 $5,000.00 $3,00e.00 $2,200.00 Required: 1. Compute the estimated uncollectible accounts at the end of the year using the following rates: Current 3% 1-30 days past due 31-60 days past due Over 60 days past due 5% 8% 20%

FINANCIAL ACCOUNTING
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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The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm's fisçal year on December 31, 20X1: LUCERO COMPANY Schedule of Accounts Receivable by Age December 31, 20X1 Past Due-Days 31-60 Account Balance Current 1-30 Over 60 Adson, Paul Allen, Alfred Ash, John Bae, John Barker, Kelsie Bentley, Maggie Blair, Herman (All other accts.) $. 650.00 $ 650.00 600.00 $4 500.00 $ 100.00 316.00 $4 316.00 360.00 360.00 104.00 74.00 30.00 340.00 120.00 150.00 70.00 76.00 54.00 22.00 49,754.00 40,796 4,320.00 2,776.00 1,862.00 Totals $52, 200.00 $ 42,000.00 $5, 000.00 $3,000.00 $2,200.00 Required: 1. Compute the estimated uncollectible accounts at the end of the year using the following rates: Current 3% 5% 1-30 days past due 31-60 days past due Over 60 days past due 8% 20%
Transcribed Image Text:The schedule of accounts receivable by age, shown below, was prepared for the Lucero Company at the end of the firm's fisçal year on December 31, 20X1: LUCERO COMPANY Schedule of Accounts Receivable by Age December 31, 20X1 Past Due-Days 31-60 Account Balance Current 1-30 Over 60 Adson, Paul Allen, Alfred Ash, John Bae, John Barker, Kelsie Bentley, Maggie Blair, Herman (All other accts.) $. 650.00 $ 650.00 600.00 $4 500.00 $ 100.00 316.00 $4 316.00 360.00 360.00 104.00 74.00 30.00 340.00 120.00 150.00 70.00 76.00 54.00 22.00 49,754.00 40,796 4,320.00 2,776.00 1,862.00 Totals $52, 200.00 $ 42,000.00 $5, 000.00 $3,000.00 $2,200.00 Required: 1. Compute the estimated uncollectible accounts at the end of the year using the following rates: Current 3% 5% 1-30 days past due 31-60 days past due Over 60 days past due 8% 20%
2. As of December 31, 20X1, there is a credit balance of $108 in Allowance for Doubtful Accounts. Compute the amount of the adjustment for uncollectible accounts expense that must be made as part of the adjusting entries. 3. Prepare a journal entry to record the adjustment for the estimated losses. Use Uncollectible Accounts Expense and Allowance for Doubtful Accounts. 4. On May 10, 20X2, the $316 account receivable of John Ash was recognized as uncollectible. Prepare a journal entry to record this transaction. 5. On June 12, 20X2, a check for $100 was received from Zeke Martin to apply to his account, which had been written off on November 8, 20X1, as uncollectible. Record the reversal of the previous write-off in the general journal. The cash obtained has already been entered in the cash receipts journal. 6. Suppose that instead of aging the accounts receivable, the company estimated the uncollectible accounts to be 5.0 percent of the total accounts receivable on December 31, 20X1. Give the general journal entry to record the adjustment for estimated losses from uncollectible accounts. Assume that Allowance for Doubtful Accounts has a credit balance of $108 before the adjusting entry. Analyze: What impact would the change in estimation method described in item 6 have on the net income for fiscal 20X1? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Analyze Compute the estimated uncollectible accounts at the end of the year using the following rates:
Transcribed Image Text:2. As of December 31, 20X1, there is a credit balance of $108 in Allowance for Doubtful Accounts. Compute the amount of the adjustment for uncollectible accounts expense that must be made as part of the adjusting entries. 3. Prepare a journal entry to record the adjustment for the estimated losses. Use Uncollectible Accounts Expense and Allowance for Doubtful Accounts. 4. On May 10, 20X2, the $316 account receivable of John Ash was recognized as uncollectible. Prepare a journal entry to record this transaction. 5. On June 12, 20X2, a check for $100 was received from Zeke Martin to apply to his account, which had been written off on November 8, 20X1, as uncollectible. Record the reversal of the previous write-off in the general journal. The cash obtained has already been entered in the cash receipts journal. 6. Suppose that instead of aging the accounts receivable, the company estimated the uncollectible accounts to be 5.0 percent of the total accounts receivable on December 31, 20X1. Give the general journal entry to record the adjustment for estimated losses from uncollectible accounts. Assume that Allowance for Doubtful Accounts has a credit balance of $108 before the adjusting entry. Analyze: What impact would the change in estimation method described in item 6 have on the net income for fiscal 20X1? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Analyze Compute the estimated uncollectible accounts at the end of the year using the following rates:
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