Direct write-off method This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable . Under this method, accounts would be written off only when the receivables from a customer remain uncollectible. To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

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Answer 1

Question

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

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Allowance for Doubtful Accounts has a debit balance of $1,800 at the end of the year, before adjustments. If an analysis of receivables indicates doubtful accounts of $29,500, what will be the amount of the appropriate adjusting entry?

I am looking for the correct answer to this general accounting question with appropriate explanations.

Fiona Industries plans to produce 30,000 units next period at a denominator activity of 60,000 direct labor hours. The direct labor wage rate is $16.50 per hour. The company's standards allow 2.2 yards of direct materials for each unit of product; the material costs $10.50 per yard. The company's budget includes a variable manufacturing overhead cost of $3.25 per direct labor hour and fixed manufacturing overhead of $285,000 per period. Using 60,000 direct labor hours as the denominator activity, compute the predetermined overhead rate and break it down into variable and fixed elements.

Answer 2

Question

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

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Answer 3

Question

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

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Answer 4

Question

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

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Answer 5

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

Answer 6

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

Answer 7

Chapter 8, Problem 8.5E

(a)

To determine

Direct write-off method

This method does not make allowance or estimation for uncollectible accounts, instead this method directly write-off the actual uncollectible accounts by debiting bad debt expense and by crediting accounts receivable. Under this method, accounts would be written off only when the receivables from a customer remain uncollectible.

To prepare: The journal entry to write-off $1,400 of accounts receivable as uncollectible, under direct write-off method.

Answer 8

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

Answer 9

(b) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 1% of net sales.

Answer 10

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

Answer 11

(b) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 10% of accounts receivable.

Answer 12

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

Answer 13

(c) (1)

To determine

Percentage-of-sales basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of net credit sale for a specific period. Estimated bad debts would be treated as a bad debt expense of the particular period.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expense are expected to be 0.75% of net sales.

Answer 14

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

Answer 15

(c) (2)

To determine

Percentage-of-receivables basis:

It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period. Estimated bad debts would be treated as a target allowance balance.

To Prepare: The adjusting journal entry for recording the bad debt expense for the year, under allowance method, if bad debt expenses are expected to be 6% of accounts receivable.

Answer 16

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Answer 17

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Answer 19

Ch. 8 - Prob. 1Q Ch. 8 - Prob. 2Q Ch. 8 - Prob. 3Q Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Prob. 8Q Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

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