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Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter 5, Problem 94.1C
To determine
Aging method:
This is a method in which the receivables are sorted according to their collectable estimation. This is done on the basis of their outstanding invoices period. Basically, aging means to check the how old an outstanding balance of receivable is present in the books.
The effect on net income if
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J-Hope Company prepared an aging of its Accounts Receivable at December 31, 2020 and determined that the estimated uncollectibles on that date was P85,200. During 2020, some customers’ accounts were written off. Additional information is available as follows:
Allowance for Bad Debts, December 31, 2019- P63,000
Bad debts expense reported in 2020 profit or loss- P18,000
Accounts Receivable, December 31, 2020- P607,500
Uncollectible accounts recovery during 2020- P12,000
How much were the accounts written off during 2020?
A P18,000
B P6,000
C P22,200
D P7,800
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?
Chapter 5 Solutions
Cornerstones of Financial Accounting
Ch. 5 - When is revenue recognized?Ch. 5 - When is a performance obligation satisfied?Ch. 5 - At what amount should sales revenue be recorded...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - Why is the direct write-off method not GAAP?
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - How much interest will be due at maturity for each...Ch. 5 - A business borrows $1,000, signing a note that...Ch. 5 - Prob. 16DQCh. 5 - Describe what happens when receivables are...Ch. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20DQCh. 5 - Prob. 21DQCh. 5 - How may analyzing sales and receivables provide...Ch. 5 - Prob. 23DQCh. 5 - Prob. 1MCQCh. 5 - When is revenue from the sale of merchandise...Ch. 5 - What does the phrase, Revenue is recognized at the...Ch. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - All of the following are ways in which receivables...Ch. 5 - Which one of the following best describes the...Ch. 5 - If a company uses the direct write-off method of...Ch. 5 - Prob. 11MCQCh. 5 - Which of the following best describes the concept...Ch. 5 - The aging method is closely related to the a....Ch. 5 - Prob. 14MCQCh. 5 - Prob. 15MCQCh. 5 - Prob. 16MCQCh. 5 - Zenephia Corp. accepted a 9-month note receivable...Ch. 5 - Prob. 18MCQCh. 5 - Prob. 19MCQCh. 5 - ( Appendix 5A) Under the gross method, the seller...Ch. 5 - Service Revenue Kibitz Fitness received S30000...Ch. 5 - Service Revenue Softball Magazine Company received...Ch. 5 - Prob. 23CECh. 5 - Prob. 24CECh. 5 - Percentage of Credit Sales Clarissa Company has...Ch. 5 - Write-Off of Uncollectible Accounts The Rock has...Ch. 5 - Aging Method On January 1, 2019, Hungryman Inc....Ch. 5 - Aging Method On January 1, 2019, Smith Inc. has...Ch. 5 - Prob. 29CECh. 5 - Prob. 30CECh. 5 - Accounts Receivable Balance Beginning accounts...Ch. 5 - Accounts Receivable Balance Beginning accounts...Ch. 5 - Prob. 33CECh. 5 - Notes Receivable Metzler Communications designs...Ch. 5 - Notes Receivable Link Communications programs...Ch. 5 - Ratio Analysis The following information pertains...Ch. 5 - Ratio Analysis Diviney Corporations net sales and...Ch. 5 - Prob. 38CECh. 5 - Service Revenue H**R Wholesalers is a retailer...Ch. 5 - Service Revenue Melrose Milk Delivery provides...Ch. 5 - Prob. 41BECh. 5 - Prob. 42BECh. 5 - Prob. 43BECh. 5 - Write-Off of Uncollectible Accounts King...Ch. 5 - Aging Method Spotted Singer sells karaoke machines...Ch. 5 - Aging Method Ingrid Inc. has strict credit...Ch. 5 - Percentage of Credit Sales Method Ruby Red...Ch. 5 - Collection of Amounts Previously Written Off...Ch. 5 - Accounts Receivable Balance Hart Inc. began the...Ch. 5 - Accounts Receivable Balance XYZ Corp sells widgets...Ch. 5 - Accounts Receivable Balance Rays beginning and...Ch. 5 - Prob. 52BECh. 5 - Prob. 53BECh. 5 - Prob. 54BECh. 5 - Ratio Analysis Dobbys income statement lists net...Ch. 5 - Ratio Analysis Rose Corporation sells upscale...Ch. 5 - Prob. 57BECh. 5 - ( Appendix 5A) Sales Discounts Harry Gardner...Ch. 5 - ( Appendix 5A) Sales Discounts Ramsden Inc....Ch. 5 - Calculation of Revenue Wallace Motors buys and...Ch. 5 - Prob. 61ECh. 5 - Calculation of Revenue from Cash Collection...Ch. 5 - Prob. 63ECh. 5 - Sales and Sales Returns and Allowances Rubin...Ch. 5 - Average Uncollectible Account Losses and Bad Debt...Ch. 5 - Bad Debt Expense: Percentage of Credit Sales...Ch. 5 - Prob. 67ECh. 5 - Bad Debt Expense: Aging Method Glencoe Supply had...Ch. 5 - Aging Receivables and Bad Debt Expense Perkinson...Ch. 5 - Allowance for Doubtful Accounts At the beginning...Ch. 5 - Collection of Amounts Previously Written Off...Ch. 5 - Prob. 72ECh. 5 - Accounting for Notes Receivable On November 30,...Ch. 5 - Recording Notes Receivable: Issuance, Payment, and...Ch. 5 - Prob. 75ECh. 5 - Ratio Analysis The following information was taken...Ch. 5 - Ratio Analysis The following information was taken...Ch. 5 - Prob. 78ECh. 5 - Prob. 79APSACh. 5 - Prob. 80APSACh. 5 - Prob. 81APSACh. 5 - Prob. 82APSACh. 5 - Bad Debt Expense: Percentage of Credit Sales...Ch. 5 - Aging Method Bad Debt Expense Cindy Bagnal, the...Ch. 5 - Determining Bad Debt Expense Using the Aging...Ch. 5 - Accounting for Notes Receivable Yarnell...Ch. 5 - Prob. 87APSACh. 5 - Prob. 88APSACh. 5 - Prob. 79BPSBCh. 5 - Prob. 80BPSBCh. 5 - Prob. 81BPSBCh. 5 - Prob. 82BPSBCh. 5 - Prob. 83BPSBCh. 5 - Aging Method Bad Debt Expense Carol Simon, the...Ch. 5 - Determining Bad Debt Expense Using the Aging...Ch. 5 - Prob. 86BPSBCh. 5 - Prob. 87BPSBCh. 5 - Prob. 88BPSBCh. 5 - Ethics and Revenue Recognition Alan Spalding is...Ch. 5 - Prob. 89.2CCh. 5 - Prob. 89.3CCh. 5 - Prob. 90.1CCh. 5 - Prob. 90.2CCh. 5 - Prob. 90.3CCh. 5 - Prob. 91CCh. 5 - Prob. 92.1CCh. 5 - Prob. 92.2CCh. 5 - Prob. 93.1CCh. 5 - Prob. 93.2CCh. 5 - Prob. 94.1CCh. 5 - Prob. 94.2CCh. 5 - Prob. 95.1CCh. 5 - Prob. 95.2CCh. 5 - Prob. 95.3CCh. 5 - Prob. 95.4CCh. 5 - Prob. 95.5CCh. 5 - Prob. 95.6CCh. 5 - Prob. 95.7CCh. 5 - Comparative Analysis: Under Armour, Inc., versus...Ch. 5 - Prob. 96.2CCh. 5 - Prob. 96.3CCh. 5 - Prob. 96.4CCh. 5 - Prob. 96.5CCh. 5 - Prob. 96.6CCh. 5 - Prob. 97.1CCh. 5 - Prob. 97.2C
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Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License