Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 7, Problem 7.1DC
Reading 3M Company’s
The following current asset appears on the balance sheet in 3M Company’s Form 10-K for the year ended December 31, 2013 (amounts in millions of dollars):
Required
- What is the balance in 3M Company’s Allowance for Doubtful Accounts at the end of 2013 and 2012?
- What is the net realizable value of 3M Company’s accounts receivable at the end of each of these two years?
- What caused increases in the allowance account during 2013? What caused decreases? Explain what a net decrease in the account for the year means.
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The following information was taken from the accounts receivable records of Monty Corporation as at December 31, 2020:
OutstandingBalance
Percentage Estimatedto be Uncollectible
0 – 30 days outstanding
$156,000
0.5%
31 – 60 days outstanding
65,400
2.5%
61 – 90 days outstanding
40,000
4.0%
91 – 120 days outstanding
20,800
6.5%
Over 120 days outstanding
5,100
10.0%
(a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,280 prior to the adjustment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
(b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $4,010 prior to the…
A balance sheet extract of Kahwati Ltd. reported as at 30 June, 2020;
Accounts Receivable $981 485
Allowance for Doubtful Debts (18 950)
The company recorded the following for the year ending 30 June, 2021:
Credit sales income totalling, $1 638 000
Credit sales returns totalling, $21 360
Accounts receivable collections, $1 893 000
Accounts receivable written off – uncollectable $17 695
Based on ageing of accounts receivable analysis undertaken at the end of June, 2021 the company decided that the Allowance for Doubtful Debts account should have a credit balance of $21 250 on the Balance Sheet at June 30, 2021
What is the net realizable value of accounts receivable at the end of year, given the following information:Balance in Accounts Receivable at end of year, $104,000Balance in Allowance for Doubtful Accounts, beginning of year, $2,000 debitWrite-offs during year, $5,000Bad debt expense for year, $9,000Recoveries during year of accounts previously written-off, $2,000
Chapter 7 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 7 - Allowance Method of Accounting for Bad...Ch. 7 - Notes Receivable On September 1, 2016, Dougherty...Ch. 7 - Prob. 7.19ECh. 7 - Prob. 7.19MCECh. 7 - Allowance Method for Accounting for Bad Debts At...Ch. 7 - Allowance Method for Accounting for Bad Debts At...Ch. 7 - Reading 3M Companys Balance Sheet: Accounts...
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