Chapter 8, Problem 8.1TI

Requirement (1)

To determine

Accounts receivable

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.

Allowance method:

It is a method for accounting bad debt expense, where uncollectible accounts receivables are estimated and recorded at the end of particular period. Under this method, bad debts expenses are estimated and recorded prior to the occurrence of actual bad debt, in compliance with matching principle by using the allowance for bad debt account.

Write-off:

Write-off refers to deduction of a certain amount from accounts receivable, when it becomes uncollectible.

The accounts receivable on the financial statement.

Requirement (2)

To determine

The amount of accounts receivable as of January 30, 2016 and as of January 31, 2015.

Requirement (3)

To determine

The amount of allowance for doubtful accounts as of January 30, 2016 and as of January 31, 2015.

Requirement (4)

To determine

The gross amount of accounts receivable as of January 30, 2016 and as of January 31, 2015.

Requirement (5)

To determine

To draw: The T accounts that details the changes in the allowance for doubtful accounts for 2015.