Concept explainers
Concept Introduction:
Allowance method:
Under the Allowance method the estimated
Direct write off method:
Under the Direct write off method the actual bad debts are directly written of using the
Aging of receivable method:
Bad debts expense can be recognized with several methods. Aging of receivable method is one of those methods. In this method the receivables are categorized into different categories according to the age and percentage of uncollectible is determined for each age and bad debts are calculated using these percentages.
Percent of sales method:
Bad debts expense can be recognized with several methods. Percent of sales is one of those methods. Under this method the bad debts expense is calculated as a percentage of sales.
Requirement-1:
To prepare:
The
Concept Introduction:
Allowance method:
Under the Allowance method the estimated bad debts expenses are recorded using the Allowance for doubtful account and the actual bad debts written off using this account. Allowance for doubtful accounts represents the amount of expected bad debts or uncollectable accounts. This account is made as a provision for future bad debts.
Direct write off method:
Under the Direct write off method the actual bad debts are directly written of using the accounts receivable account.
Aging of receivable method:
Bad debts expense can be recognized with several methods. Aging of receivable method is one of those methods. In this method the receivables are categorized into different categories according to the age and percentage of uncollectible is determined for each age and bad debts are calculated using these percentages.
Percent of sales method:
Bad debts expense can be recognized with several methods. Percent of sales is one of those methods. Under this method the bad debts expense is calculated as a percentage of sales.
Requirement-2:
To indicate:
The presentation of Accounts Receivable and Allowance for doubtful account on the
Concept Introduction:
Allowance method:
Under the Allowance method the estimated bad debts expenses are recorded using the Allowance for doubtful account and the actual bad debts written off using this account. Allowance for doubtful accounts represents the amount of expected bad debts or uncollectable accounts. This account is made as a provision for future bad debts.
Direct write off method:
Under the Direct write off method the actual bad debts are directly written of using the accounts receivable account.
Aging of receivable method:
Bad debts expense can be recognized with several methods. Aging of receivable method is one of those methods. In this method the receivables are categorized into different categories according to the age and percentage of uncollectible is determined for each age and bad debts are calculated using these percentages.
Percent of sales method:
Bad debts expense can be recognized with several methods. Percent of sales is one of those methods. Under this method the bad debts expense is calculated as a percentage of sales.
Requirement-3:
To indicate:
The presentation of Accounts Receivable and Allowance for doubtful account on the balance sheet in the case of 1(c)

Want to see the full answer?
Check out a sample textbook solution
Chapter 9 Solutions
FUND.ACCT.PRIN.(LL)-W/ACCESS >CUSTOM<
- Please help me solve this general accounting question using the right accounting principles.arrow_forwardI am searching for a clear explanation of this financial accounting problem with valid methods.arrow_forwardCould you explain the steps for solving this financial accounting question accurately?arrow_forward
- For the month ended February 29, 2024, Collins Manufacturing reported revenues of $78,500, expenses of $72,300, and dividends of $5,800. Collins Manufacturing experienced a net income or net loss of what amount?arrow_forwardCan you demonstrate the proper approach for solving this financial accounting question with valid techniques?arrow_forwardSUBJECT=GENERAL ACOOUNTINGarrow_forward
- Dear expert!! I need help in this question. will get unhelpful if Wrong answer.arrow_forwardPlease show me the correct approach to solving this financial accounting question with proper techniques.arrow_forwardSuppose that Jensen Corporation has annual sales of $8.92 million, cost of goods sold of $4.73 million, average inventories of $1,580,000, and average accounts receivable of $820,000.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





