At December 31, Y5; Aylmer Inc had the follow amounts related to accounts receivable: 0- 30 days 226,900 Total sales 1,000,000 31 - 60 days 452,600 Percent of sales on account 96% 61- 90 days 78,690 91 - 120 days 45,800 Over 120 days 10,560 TOTAL 814,550 Based on prior years, and an aging analysis, Aylmer's management determined that the following percents are estimated to be uncollectible: 0- 30 days 0.30% 31 - 60 days 1.00% 61 - 90 days 1.50% 91 - 120 days 4.00% Over 120 days 8.00% REQUIRED - based on the above information, answer the four (4) following INDEPENDANT questions: 1. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expen assuming that the allowance for doubtful accounts has a CREDIT balance of 3,350 2. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense, assuming that the allowance for doubtful accounts has a DEBIT balance of 750 3. If Aylmer uses the income statement approach, given the information above, prepare the appropriate journal entry to record bad debt expense: assuming that bad debt expense is estimated to be 1.50% of credit sales 4. On January 28, Y6, a customer that owed Aylmer $4,890 declared bankruptcy. Prepare the appropriate journal entry.
At December 31, Y5; Aylmer Inc had the follow amounts related to accounts receivable: 0- 30 days 226,900 Total sales 1,000,000 31 - 60 days 452,600 Percent of sales on account 96% 61- 90 days 78,690 91 - 120 days 45,800 Over 120 days 10,560 TOTAL 814,550 Based on prior years, and an aging analysis, Aylmer's management determined that the following percents are estimated to be uncollectible: 0- 30 days 0.30% 31 - 60 days 1.00% 61 - 90 days 1.50% 91 - 120 days 4.00% Over 120 days 8.00% REQUIRED - based on the above information, answer the four (4) following INDEPENDANT questions: 1. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expen assuming that the allowance for doubtful accounts has a CREDIT balance of 3,350 2. If Aylmer uses the balance sheet approach, given the information above, prepare the appropriate journal entry to record bad debt expense, assuming that the allowance for doubtful accounts has a DEBIT balance of 750 3. If Aylmer uses the income statement approach, given the information above, prepare the appropriate journal entry to record bad debt expense: assuming that bad debt expense is estimated to be 1.50% of credit sales 4. On January 28, Y6, a customer that owed Aylmer $4,890 declared bankruptcy. Prepare the appropriate journal entry.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...
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