2) On December 31, 2017, Sunmi Company has an outstanding accounts receivable balance of P130,000,000 broken down into: 0-60 days outstanding, P50,000,000; 61-120 days outstanding, P40,000,000; 121-365 days outstanding, P30,000,000; over one year outstanding, P10,000,000. Estimated uncollectible accounts are 2%, 5%, 10% and 25% respectively. During the current year, Sunmi wrote off P2,500,000 of accounts receivable and recovered P500,000 from accounts previously written off in prior years. On December 31, 2016, Sunmi had an allowance for doubtful accounts of P5,000,000. What amount should be reported as doubtful accounts expense for the year ended December 31, 2017? A. 5,500,000 B. 8,500,000 C. 4,500,000 D. 3,000,000

2) On December 31, 2017, Sunmi Company has an outstanding accounts receivable balance of P130,000,000 broken down into: 0-60 days outstanding, P50,000,000; 61-120 days outstanding, P40,000,000; 121-365 days outstanding, P30,000,000; over one year outstanding, P10,000,000. Estimated uncollectible accounts are 2%, 5%, 10% and 25% respectively. During the current year, Sunmi wrote off P2,500,000 of accounts receivable and recovered P500,000 from accounts previously written off in prior years. On December 31, 2016, Sunmi had an allowance for doubtful accounts of P5,000,000. What amount should be reported as doubtful accounts expense for the year ended December 31, 2017? A. 5,500,000 B. 8,500,000 C. 4,500,000 D. 3,000,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter7: Receivables And Investments

Section: Chapter Questions

Problem 7.1AP: Allowance Method for Accounting for Bad Debts At the beginning of 2016, Miyazaki Companys Accounts...

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Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.
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Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
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