Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1, accounts receivable were presented in the company's balance sheet as follows. Accounts receivable from clients $ 3,100,000 Less: Allowance for doubtful accounts 80,000 During year 2, $180,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $18,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $242,000 allowance to cover possible failure to collect the accounts currently outstanding. Wilcox Mills makes adjusting entries for uncollectible accounts only at year-end. What is the The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $242,000.? Debit Uncollectale account expense Credit Allowance for doubtlful account by how much? The answer is not 144,000 is not not 422,000 is not 162,000 is not 1,062,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Wilcox Mills is a manufacturer that makes all sales on 30-day credit terms. Annual sales are approximately $30 million. At the end of year 1,
| Accounts receivable from clients | $ | 3,100,000 | ||
| Less: Allowance for doubtful accounts | 80,000 | |||
During year 2, $180,000 of specific accounts receivable were written off as uncollectible. Of these accounts written off, receivables totaling $18,000 were subsequently collected. At the end of year 2, an aging of accounts receivable indicated a need for a $242,000 allowance to cover possible failure to collect the accounts currently outstanding.
Wilcox Mills makes
What is the The adjusting entry required at December 31, year 2, to increase the Allowance for Doubtful Accounts to $242,000.? Debit Uncollectale account expense Credit Allowance for doubtlful account by how much? The answer is not 144,000 is not not 422,000 is not 162,000 is not 1,062,000
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