Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
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Chapter 6, Problem 6.9E
a.
To determine
Indicate the amount and direction of effects on the financial statement accounts and on the overall
b.
To determine
Indicate the amount and direction of effects on the financial statement accounts and on the overall
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Determining Bad Debt Expense Using the Aging Method
At the beginning of the year, Lennon Electronics had an accounts receivable balance of $29,800 and a
balance in the allowance for doubtful accounts of $2,425 (credit). During the year, Lennon had credit sales of
$752,693, collected accounts receivable in the amount of $653,800, wrote off $20,400 of accounts
receivable, and had the following data for accounts receivable at the end of the period:
Accounts Receivable
Proportion Expected
Category
Amount
to Default
Current
$22,700
0.01
1-15 days past due
8,600
0.04
16-45 days past due
4,900
0.09
46-90 days days past due
3,200
0.17
Over 90 days past due
2,100
0.30
$41,500
Lennon has a December 31 year-end.
Required:
1. Determine the desired postadjustment balance in allowance for doubtful accounts. Round amounts to
nearest dollar for each aging category.
2. Determine the preadjustment balance in allowance for doubtful accounts before the bad debt expense
adjusting entry is posted.
3.…
Funnel Direct recorded $1,344,780 in credit sales for the year and $698,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method.
A. Record the year-end adjusting entry for 2018 bad debt using the income statement method.
B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method.
C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,788; record the year-end entry for bad
debt using the income statement method, and then the entry using the balance sheet method.
If an amount box does not require an entry, leave it blank. Round your answers to two decimal places.
А. Dec. 31
To record bad debt, income statement method
В. Dec. 31
To record bad debt, balance sheet method
C. Dec. 31
To record bad debt, income statement method, previous credit balance
Dec. 31
To record bad debt, balance sheet method, previous credit balance
Funnel Direct recorded $1,341,780 in credit sales for the year and $699,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method.
A.
Record the year-end adjusting entry for 2018 bad debt using the income statement method.
B.
Record the year-end adjusting entry for 2018 bad debt using the balance sheet method.
C.
Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,588; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
If an amount box does not require an entry, leave it blank. Round your answers to two decimal places.
A. Dec. 31
- Select -
- Select -
- Select -
- Select -
To record bad debt, income statement method
B. Dec. 31
- Select -
- Select -
- Select -
- Select -
To record bad debt, balance sheet method
C. Dec. 31
- Select -
- Select -…
Chapter 6 Solutions
Financial Accounting
Ch. 6 - Prob. 1QCh. 6 - What is gross profit or gross margin on sales? In...Ch. 6 - What is a credit card discount? How does it affect...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Differentiate accounts receivable from notes...Ch. 6 - Which basic accounting principle is the allowance...Ch. 6 - Using the allowance method, is bad debt expense...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Briefly explain how the total amount of cash...Ch. 6 - Prob. 16QCh. 6 - Sales discounts with terms 2/10, n/30 mean: a. 10...Ch. 6 - Gross sales total 300,000, one-half of which were...Ch. 6 - A company has been successful in reducing the...Ch. 6 - When a company using the allowance method writes...Ch. 6 - You have determined that Company X estimates bad...Ch. 6 - Prob. 6MCQCh. 6 - Which of the following is not a step toward...Ch. 6 - When using the allowance method, as bad debt...Ch. 6 - Which of the following best describes the proper...Ch. 6 - Prob. 10MCQCh. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Recording Bad Debts Prepare journal entries for...Ch. 6 - Prob. 6.4MECh. 6 - Determining the Effects of Credit Policy Changes...Ch. 6 - Prob. 6.6MECh. 6 - Prob. 6.7MECh. 6 - Prob. 6.1ECh. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.5ECh. 6 - Reporting Bad Debt Expense and Accounts Receivable...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Computing Bad Debt Expense Using Aging Analysis...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Interpreting tho Effects of Salos Declines and...Ch. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.1PCh. 6 - Recording Bad Debts and Interpreting Disclosure of...Ch. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Preparing an Income Statement and Computing the...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Reporting Net Sales and Expenses with Discounts,...Ch. 6 - Prob. 6.2APCh. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.1CONCh. 6 - Finding Financial Information Refer to the...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - Prob. 6.5CP
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