At December 31, 2021, before any year-end adjustments, the Accounts Receivable balance of Alpha Company, Inc., is $390,000. The Allowance for Uncollectible Accounts has a(n) $15,500 credit balance. Alpha prepares the following aging schedule for Accounts Receivable: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too l First, calculate a revised allowance for uncollectible accounts amount and the adjusting entry amount. (Round to the nearest dollar.) Allowance for Uncollectible Accounts: Credit balance needed 1-30 31-60 61-90 Over 90 Subtotal Less: Unadjusted balance Adjusting entry amount The credit balance at December 31 in Allowance for Uncollectible Accounts should be ]. Thus, the current balance of the allowance account is Requirement 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance. First, make the entry required by the aging schedule. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Dec 31 Accounts Now, prepare a T-account for the allowance Debit Credit . The current balance is Requirements 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low? 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance. 3. Show how Alpha will report Accounts Receivable on its December 31 balance sheet. Data table Total Balance $390,000 Estimated uncollectible Print 1-30 Days $160,000 0.6% Print Done Age of Accounts 61-90 Days $80,000 5.0% 31-60 Days $120,000 2.0% Done Over 90 Days $30,000 40.0% X
At December 31, 2021, before any year-end adjustments, the Accounts Receivable balance of Alpha Company, Inc., is $390,000. The Allowance for Uncollectible Accounts has a(n) $15,500 credit balance. Alpha prepares the following aging schedule for Accounts Receivable: (Click the icon to view the aging schedule.) Read the requirements. Requirement 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too l First, calculate a revised allowance for uncollectible accounts amount and the adjusting entry amount. (Round to the nearest dollar.) Allowance for Uncollectible Accounts: Credit balance needed 1-30 31-60 61-90 Over 90 Subtotal Less: Unadjusted balance Adjusting entry amount The credit balance at December 31 in Allowance for Uncollectible Accounts should be ]. Thus, the current balance of the allowance account is Requirement 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance. First, make the entry required by the aging schedule. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Dec 31 Accounts Now, prepare a T-account for the allowance Debit Credit . The current balance is Requirements 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low? 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance. 3. Show how Alpha will report Accounts Receivable on its December 31 balance sheet. Data table Total Balance $390,000 Estimated uncollectible Print 1-30 Days $160,000 0.6% Print Done Age of Accounts 61-90 Days $80,000 5.0% 31-60 Days $120,000 2.0% Done Over 90 Days $30,000 40.0% X
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter14: Accounting For Uncollectible Accounts Receivable
Section: Chapter Questions
Problem 1CP
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:At December 31, 2021, before any year-end adjustments, the Accounts Receivable balance of Alpha Company, Inc., is $390,000. The Allowance for Uncollectible Accounts has a(n) $15,500 credit balance. Alpha prepares the following aging schedule for Accounts Receivable:
(Click the icon to view the aging schedule.)
Read the requirements.
Requirement 1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too l
First, calculate a revised allowance for uncollectible accounts amount and the adjusting entry amount. (Round to the nearest dollar.)
Allowance for Uncollectible Accounts:
Credit balance needed
1-30
31-60
61-90
Over 90
Subtotal
Less: Unadjusted balance
Adjusting entry amount
The credit balance at December 31 in Allowance for Uncollectible Accounts should be
Thus, the current balance of the allowance account is
Requirement 2. Make the entry required by the aging schedule. Prepare a T-account for the allowance.
First, make the entry required by the aging schedule. (Record debits first, then credits. Exclude explanations from any journal entries.)
Journal Entry
Date
Dec 31
Accounts
Now, prepare a T-account for the allowance.
Debit
The current balance is
Credit
Requirements
1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance
account adequate? Too high? Too low?
2. Make the entry required by the aging schedule. Prepare a T-account for the allowance
3. Show how Alpha will report Accounts Receivable on its December 31 balance sheet.
Data table
Total Balance
$390,000
Estimated uncollectible
Print
1-30 Days
$160,000
0.6%
Print
Done
Age of Accounts
61-90 Days
$80,000
5.0%
31-60 Days
$120,000
2.0%
Done
Over 90 Days
$30,000
40.0 %
X
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