Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Southwest Pediatrics has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $130,000; Allowance for Uncollectible Accounts = $2,100 (debit). On December 31, 2021, Southwest estimates uncollectible accounts to be 20% of accounts receivable.Required:1. Record the adjustment for uncollectible accounts on December 31, 2021.2. Determine the amount at which bad debt expense is reported in the income statement and the allowance for uncollectible accounts is reported in the balance sheet.3. Calculate net accounts receivable.
Mercy Hospital has the following balances on December 31, 2021, before any adjustment: Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below.
Age Group
AmountReceivable
Estimated PercentUncollectible
Not yet due
$50,000
15%
0 –30 days past due
11,000
20%
31– 90 days past due
8,000
45%
More than 90 days past due
1,000
85%
Total
$70,000
Required:1. Estimate the amount of uncollectible receivables.2. Record the adjustment for uncollectible accounts on December 31, 2021.3. Calculate net accounts receivable.
Chapter 5 Solutions
Financial Accounting
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