INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 7, Problem 7.8BYP
To determine
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Bad debt expense is an expense account. The amounts of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, the estimated uncollectible accounts receivable are known as bad debt expense.
To describe: The appropriate accounting treatment and required disclosures for Corporation M’s underestimation at the end of 2018.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is the error correction (requiring retroactive restatement)?
what is the definitions/general overview of error correction and a change in estimate
PROBLEM 9
Robin Company uses the following allowance method of accounting for bad debts. The following summary
schedule was prepared from an aging of accounts receivable outstanding on December 31, 2021.
No. of Days Outstanding
0-30 days
31-60 days
Over 60 days
The following information is available for the current year:
Net credit sales for the year
Allowance for uncollectible accounts, January 1, 2021
Allowance for uncollectible accounts, December 31, 2021
(before adjustment)
Amount
P500,000
200,000
100,000
Probability of Collection
98%
90%
80%
P4,000,000
5,000 (cr.)
2,000 (dr.)
Explain how to get the Uncollectible accounts expense
Explain the allowance for uncollectible accounts reported in word's financial statements for 2021.
Chapter 7 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
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 - 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 - Briefly explain the difference between the income...
Ch. 7 - Prob. 7.11QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.14QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Explain how the CECL model (introduced in ASU No....Ch. 7 - Prob. 7.18QCh. 7 - Prob. 7.19QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.21QCh. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Cash discounts; gross method LO73 On December 28,...Ch. 7 - Prob. 7.5BECh. 7 - Sales re turns LO74 During 2018, its first year...Ch. 7 - Sales re turns LO74 Refer to the situation...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.12BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.15BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.17BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.20BECh. 7 - Prob. 7.21BECh. 7 - Impairments of Accounts Receivable Appendix 7B...Ch. 7 - Credit Losses on Accounts Receivable (CECL Model) ...Ch. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Trade and cash discounts; the gross method and the...Ch. 7 - Prob. 7.6ECh. 7 - Cash discounts; the net method LO73 [This is a...Ch. 7 - Sales returns LO74 Halifax Manufacturing allows...Ch. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Uncollectible accounts; allowance method; balance...Ch. 7 - Uncollectible accounts; allowance method and...Ch. 7 - Uncollectible accounts; allowance method; solving...Ch. 7 - Note receivable LO77 On June 30, 2018, the...Ch. 7 - Noninterest-bearing note receivable LO77 [This is...Ch. 7 - Long-term notes receivable LO77 On January 1,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Discounting a note receivable LO78 Selkirk...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Receivables; transaction analysis LO73, LO75...Ch. 7 - Prob. 7.25ECh. 7 - Prob. 7.26ECh. 7 - Prob. 7.27ECh. 7 - Prob. 7.28ECh. 7 - Prob. 7.29ECh. 7 - Prob. 7.30ECh. 7 - Impairments of Notes Receivable Appendix 7B At...Ch. 7 - Prob. 7.32ECh. 7 - Prob. 7.33ECh. 7 - Prob. 7.34ECh. 7 - Uncollectible accounts; allowance method; income...Ch. 7 - Uncollectible accounts; Amdahl LO75 Real World...Ch. 7 - Bad debts; Nike, Inc. LO75 Real World Financials...Ch. 7 - Uncollectible accounts LO75, LO76 Raintree...Ch. 7 - Prob. 7.5PCh. 7 - Notes receivable; solving for unknowns LO77...Ch. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10PCh. 7 - Prob. 7.11PCh. 7 - Accounts and notes receivable; discounting a note...Ch. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15PCh. 7 - Prob. 7.16PCh. 7 - Prob. 7.17PCh. 7 - Prob. 7.1BYPCh. 7 - Prob. 7.2BYPCh. 7 - Prob. 7.3BYPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.6BYPCh. 7 - Prob. 7.7BYPCh. 7 - Prob. 7.8BYPCh. 7 - Prob. 7.9BYPCh. 7 - Prob. 7.10BYPCh. 7 - Prob. 7.11BYPCh. 7 - Prob. 1CCTC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- question 6 part 4 and 5arrow_forwardExercise 7-13 (Algo) Uncollectible accounts; allowance method estimating bad debts as percentage of net sales vs. direct write-off method [LO7-5, 7-6] Ervin Company uses the allowance method to account for uncollectible accounts receivable. The allowance account is adjusted based on bad debt expense as a percentage of credit sales. For 2024, net credit sales totaled $5,600,000, and the estimated bad debt percentage is 1.70%. No previously written-off accounts receivable were reinstated during 2024. The allowance for uncollectible accounts had a credit balance of $53,000 at the beginning of 2024 and $45,500, after adjusting entries, at the end of 2024. Required: 1. What is bad debt expense for 2024 as a percent of net credit sales? 2. Assume Ervin makes no other adjustment of bad debt expense during 2024. Determine the amount of accounts receivable written off during 2024. 3. If the company uses the direct write-off method, what would bad debt expense be for 2024? 1. Bad debt expense as…arrow_forwardhharrow_forward
- ACCT 102 Please show calculations, thank you!arrow_forwardQuestion 15 A company has provided the following information for Allowance for Doubtful Accounts: Allowance for Doubtful Accounts Beginning Balance = $2,700 Wrote-off $2,100 of uncollectible accounts Allowance for Doubtful Accounts Ending Balance = 3,200 How much did the company record as Bad Debt Expense? $3,800 None of these are correct. $2,600 $500 O $1,600arrow_forwardQuestion 9 Concord Company provides for bad debt expense at the rate of 3% of accounts receivable. The following data are available for 2018: Allowance for doubtful accounts, 1/1/18 (Cr.) $ 11300 Accounts written off as uncollectible during 2018 10400 Ending accounts receivable 1204000 The Allowance for Doubtful Accounts balance at December 31, 2018, should be $37020. $900. $36120. $35220.arrow_forward
- QS 9-3 (Algo) Recovering a bad debt LO P1 Solstice Company determines on October 1 that it cannot collect $55,000 of its accounts receivable from its customer, P. Moore. It uses the direct write-off method to record this loss as of October 1. On October 30, P. Moore unexpectedly pays his account in full to Solstice Company.Record Solstice’s entries for recovery of this bad debt.arrow_forwardProblem 7-2A (Algo) Estimating and reporting bad debts LO P2, P3 [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 160,000 Credit sales $ 400,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 120,000 debit Allowance for doubtful accounts $ 1,400 debit An aging analysis estimates that 6% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.arrow_forwardProblem 6-4: The Northrock Corporation The Northrock Corporation produced the following summary of its historical experience of write offs of Accounts Receivable (A/R) on October 31, 2021: Year A/R at Year end Uncollectible and written off in subsequent years 2018 14000 700 2019 10000 1000 2020 12000 600 2021 4000 200 Required 1. Calculate the percentage loss on Accounts Receivable for the period 2018 to 2021 by calculating total write offs over the period as a % of total A/R. Round your calculation to two decimal places. 2. Compute the balance for the Allowance for Doubtful accounts (rounded to the nearest $) on October 31, 2021 if Accounts Receivable on that date were 16000. Apply the % ending A/R method using the percentage calculated in part 1. 3. Scenario A: On October 31, 2021 the unadjusted Allowance for Doubtful Accounts was 160 credit. Prepare an adjusting entry to obtain the amount that you calculated in part 2. 4. Scenario B: On October 31, 2021 the unadjusted Allowance for…arrow_forward
- 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?…arrow_forwardQuestion 6 Flyzopen Limited had a $900 credit balance in Allowance for Doubtful Accounts at December 31, 2022, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following: Estimated Percentage Current Accounts 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Total Accounts Receivable $150,000 15,000 10,000 7,000 10,000 $192.000 Uncollectible 1% 2% 6% 12% 30% Required: (a) Prepare the adjusting entry on December 31, 2022, to recognize bad debts expense. (b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $900 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts. 2arrow_forwardExercise 7-4 (Algo) Direct write-off method LO P1 Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $10,000 of its accounts receivable from Leer Company. March 29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License