Twillight Company uses the aging of accounts recelvable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, (2) 31-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of receivables of a specific age will not be paid as follows: (1) 2%, (2) 13%, and (3) 34%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $150. The total Accounts Receivable in each age category were: (1) 1-30 days old, $58,000, (2) 31-90 days old, $19,000, and (3) more than 90 days old, $3,000. Required: a. Calculate the estimate of uncollectible accounts at December 31, 2019. b. Prepare the appropriate adjusting entry dated December 31, 2019.

Twillight Company uses the aging of accounts recelvable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, (2) 31-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of receivables of a specific age will not be paid as follows: (1) 2%, (2) 13%, and (3) 34%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $150. The total Accounts Receivable in each age category were: (1) 1-30 days old, $58,000, (2) 31-90 days old, $19,000, and (3) more than 90 days old, $3,000. Required: a. Calculate the estimate of uncollectible accounts at December 31, 2019. b. Prepare the appropriate adjusting entry dated December 31, 2019.

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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You are the accountant for Black Cat Ltd. (BCL) and you have just finished the aging analysis of accounts receivable. You have estimated that $5,000 of the current $98,000 of A/R will be uncollectible. The allowance for doubtful accounts had a $400 credit balance at year-end before adjustment. What amount of bad debts would you expect to see on BCL's income statement for the year? a. $0 b. $4,600 c. $5,000 d. $5,400
Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1 to 30 days old, $12,200; (2) 31 to 90 days old, $5,200; and (3) more than 90 days old, $3,200. For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be (1) 4 percent, (2) 12 percent, and (3) 15 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance was $820 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 2. What amount of Bad Debt Expense should be recorded on December 31? 3. If the unadjusted balance in the Allowance for Doubtful Accounts was a $620 debit balance, what amount of Bad Debt Expense should be recorded on December 31? Complete this question by entering your answers in…
a. Calculate the total estimated bad debts based on the above information.
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Compare Two Methods of Accounting for Uncollectible Receivables been obtained from the accounts: Required: Assemble the desired data. Enter a decrease in the amount of expense as a negative number and all other amounts as positive numbers. Call Systems Company Bad Debt Expense
Glazer Company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various aged categories of accounts. The Glazer Company computes a total of $10,800 in estimated doubtful accounts as of December 31. Its Accounts Receivable account has a balance of $338,400 and its Allowance for Doubtful Accounts has a credit balance of $1,800 before adjustment at December 31. How much bad debts expense will Glazer report for the year? Select one: O A. $11,520 O B. $9,000 O C. $10,080 O D. $1,440.
Use the following information to answer the next two questions: Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% 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 balance of $12,200 before adjustments. What is the amount of bad debt expense Lewis Company will report on their Income Statement this year? Select one: a. 17,756 b. 3,000 c. 12,200 d. 18,000 e. 2,756
Tanning Company analyzes its receivables to estimate uncollectible accounts. The accounts receivable balance is $368,000 and credit sales are $1,000,000. An aging of accounts receivable estimates that $29,440 of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? a. Account Debit Credit Bad Debt Expense 29,440 Allowance for Doubtful Accounts 29,440 b. Account Debit Credit Bad Debt Expense 27,440 Allowance for Doubtful Accounts 27,440 c. Account Debit Credit Bad Debt Expense 94,320 Allowance for Doubtful Accounts 94,320 d. Account Debit Credit Bad Debt Expense 31,440 Allowance for Doubtful Accounts 31,440
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,236,000 and sales for the year total $14,010,000. a. The allowance account before adjustment has a credit balance of $16,700. Bad debt expense is estimated at 1/2 of 1% of sales. b. The allowance account before adjustment has a credit balance of $16,700. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $53,400. c. The allowance account before adjustment has a debit balance of $7,200. Bad debt expense is estimated at 3/4 of 1% of sales. d. The allowance account before adjustment has a debit balance of $7,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $59,800. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. а. $ b. $ С. $ d. $
The company uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered current and have a 3% uncollectible rate. Accounts more than 60 days are considered old and have a 29% uncollectible rate. If the company has $34,600 of current accounts and $4,600 of old accounts, and if the company's Allowance for Doubtful Accounts currently has an unadjusted debit balance of $1,029, in recording the adjustment to record bad debt expense, how much should be credited to the account? $_
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