INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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Chapter 7, Problem 7.14BE
Uncollectible accounts;
• LO7–5, LO7–6
Refer to the situation described in BE 7–9. Answer the two questions assuming the company estimates that future
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Exercise 7-16 (Static) Uncollectible accounts; allowance method; balance sheet approach; financial
statement effects [LO7-5, 7-6]
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2024, accounts receivable totaled $625,000. The
allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of
$32,000 at the beginning of 2024 and $21,000 in receivables were written off during the year as uncollectible. Also, $1,200 in cash
was received in December from a customer whose account previously had been written off. The company estimates bad debts by
applying a percentage of 10% to accounts receivable at the end of the year.
Required:
1. Prepare journal entries to record the write-off of receivables, the collection of $1,200 for previously written off receivables, and
the year-end adjusting entry for bad debt expense.
2. How would accounts receivable be shown in the 2024 year-end balance sheet?…
ACCT 102
Please show calculations, thank you!
12.10 Doubtful debts – ageing method *
LO3
On 1 June, McLean, Roberts and Associates had Accounts Receivable and Allowance for
Doubtful Debts accounts as set out below. Ignore GST.
Accounts Receivable
1/6
Balance
847 000
Allowance for Doubtful Debts
1/6
Balance
12 250
During June, the following transactions occurred:
1. fees earned on credit, $1 200 000
2. fees refunded, $25 000
3. accounts receivable collected, $1450 000
4. accounts written off as uncollectable, $14 740.
Based on an ageing of accounts receivable on 30 June, the firm decided that the Allowance
for Doubtful Debts account should have a credit balance of $13 000 on the balance sheet as at
30 June.
Required
(a) Prepare general journal entries to record the four transactions above and to adjust the
Allowance for Doubtful Debts account.
(b) Show how accounts receivable and the allowance for doubtful debts would appear on the
balance sheet at 30 June.
(c) On 29 July, Blundell Ltd, whose $1870 account had been written off as…
Chapter 7 Solutions
INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Prob. 7.7QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...
Ch. 7 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
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- Problem 8-12 (IAA) 31: Accounts receivable-unassigned Accounts receivable-assigned Allowance for doubtful accounts-January 1 Receivable from factor Note payable-bank 1,000,000 300,000 30,000 40,000 240,000 During the current year, the entity found itself in financial distress and decided to resort to receivable financing. On June 30, the entity factored P200,000 of accounts receivable to a finance entity. The finance entity charged a factoring fee of 5% of the accounts factored and withheld 20% of the amount factored. On December 31, the entity assigned P300,000 of accounts receivable to a bank under a nonnotification basis. The bank advanced 80% less a service fee of 5% of the accounts assigned. The entity signed a promissory note for the loan. On December 31, it is estimated that 5% of the outstanding accounts receivable may prove uncollectible. Required: 1. Prepare journal entry to record the factoring. 2. Prepare journal entry to record the assignment. 3. Prepare journal entry to…arrow_forwardQd 156.arrow_forwardVishnuarrow_forward
- reduction in the allowance in the financial statements. Which of the following explains 84. An increase in an allowance for receivables of $8,000 has been treated as a ACCA Introduction Vũ Ha Thenh A. Irrecoverable debts В. Receivables Receivables C. Irrecoverable debts Allowance for receivables Receivables D. Receivables Allowance for receivables the resulting effects? A. Net profit is overstated by $16,000, receivables overstated by $8,000 B. Net profit understated by $16,000, receivables understated by $16,000 C. Net profit overstated by $16,000, receivables overstated by $16,000 D. Gross profit overstated by $16,000, receivables overstated by $16,000 85. At 1 January 20X1, there was an allowance for receivables of $3,000. During the year, $1,000 of debts were written off as irrecoverable, and $8,00 o debts previously written off were recovered. At 31 December 20X1, it was decided to adjust the allowance for receivables to 5% of receivables which are $20,000. What is the total…arrow_forwardThe amount of the adjustment to allowance for uncollectible accounts, representing the cost of estimated future bad debts charged to the current period is known as which of the following: O Amortization Expense O Bad Debt Expense O Sales return O Cost of goods ASUS f3 f4 f5 E3 f6 f7 f9 f10 f11 4. E R Y U 0O D G H JK 08 6 5 图 %24arrow_forwardProblem 7-12 (Algo) Accounts and notes receivable; discounting a note receivable; receivables turnover ratio financial statement effects [LO7-5, 7-6, 7-7, 7-8, 7-9] Chamberlain Enterprises incorporated reported the following receivables in its December 31, 2024, year-end balance sheet: Current assets: accounts Accounts receivable, net of $37,000 in allowance for uncollectible $ 283,000 11,050 390,000 Interest receivable Notes receivable Additional Information: 1. The notes receivable account consists of two notes, a $65,000 note and a $325,000 note. The $65,000 note is dated October 31, 2024, with principal and interest payable on October 31, 2025. The $325,000 note is dated June 30, 2024, with principal and 6% Interest payable on June 30, 2025. 2. During 2025, sales revenue totaled $1,470,000, $1,345,000 cash was collected from customers, and $35,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the…arrow_forward
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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