At the beginning of Year 3 Omega Company had a $60,000 balance in its accounts receivable account and a $3,000 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events.(1) Omega earned $200,000 of revenue on account(2) Collected $210,000 cash from accounts receivable(3) Wrote-off $2,000 of accounts receivable as uncollectibleOmega estimates uncollectible accounts to be 4% of receivables. Based on this information, the December 31, Year 3 unadjusted (current) balance in allowance for doubtful accounts account (balance before expense recognition) isMultiple Choice$920.$1,000.$1,920.$5,000.

Under allowance for uncollectible account, bad debt written off are adjusted before expense…

beginning of Year 3 Omega Company had a $60,000 balance in its accounts receivable account and a $3,000 balance allowance for doubtful accounts. During Year 3, Omega experienced the following events. mega earned $200,000 of revenue on account ollected $210,000 cash from accounts receivable Prote-off $2,000 of accounts receivable as uncollectible ga estimates uncollectible accounts to be 4% of receivables. Based on this information, the December 31, Year 3 unadjusted (current) balance in allowance for doubtful accounts account (balance before expense recogniti

beginning of Year 3 Omega Company had a $60,000 balance in its accounts receivable account and a $3,000 balance allowance for doubtful accounts. During Year 3, Omega experienced the following events. mega earned $200,000 of revenue on account ollected $210,000 cash from accounts receivable Prote-off $2,000 of accounts receivable as uncollectible ga estimates uncollectible accounts to be 4% of receivables. Based on this information, the December 31, Year 3 unadjusted (current) balance in allowance for doubtful accounts account (balance before expense recogniti

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

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Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
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.
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.
At the beginning of Year 3 Omega Company had a $60,000 balance in its accounts receivable account and a $3,000 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events. (1) Omega earned $200,000 of revenue on account (2) Collected $210,000 cash from accounts receivable (3) Wrote-off $2,000 of accounts receivable as uncollectible Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the amount of net realizable value of receivables shown on the Year 3 balance sheet is Multiple Choice $50,000. $49,920. $46,080. $48,000.
At the beginning of Year 3 Randall Company had a $16,070 balance in its accounts receivable account and a $1,310 balance in allowance for doubtful accounts. During Year 3, Randall experienced the following events. (1) Randall earned $24,300 of revenue on account. (2) Collected $16,460 cash from accounts receivable. (3) Wrote-off $710 of accounts receivable as uncollectible. Randall estimates uncollectible accounts to be 3% of receivables. Based on this information, the December 31, Year 3 the ending balance in the allowance for doubtful accounts account (balance after expense recognition) is $_________
At the beginning of Year 3 Omega Company had a $75,000 balance in its accounts receivable account and a $10,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Earned $256,000 of revenue on account. (2) Collected $248,000 cash from accounts receivable. (3) Wrote off $8,500 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 ending balance in the allowance for doubtful accounts account (balance after expense recognition) is: Multiple Choice $2,980. $8,500. $2,660. $3,300.
At the beginning of Year 3 Omega Company had a $58,000 balance in its accounts receivable account and a $7,400 balance in allowance for doubtful accounts. During Year 3, Omega experienced the following events. (1) Earned $244,000 of revenue on account. (2) Collected $242,000 cash from accounts receivable. (3) Wrote off $5,800 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. Based on this information, the amount of uncollectible accounts expense shown on the Year 3 income statement is:
Renue Spa had the following balances at December 31, Year 2: Cash of $12,000, Accounts Receivable of $81,000, Allowance for Doubtful Accounts of $2,000, and Retained Earnings of $91,000. During Year 3, the following events occurred: 1. $1,900 of accounts receivable were written off as uncollectible. 2. The company unexpectedly collected $130 of receivables that had been written off in a previous accounting period. 3. Services provided on account during Year 3 were $222,000. 4. Cash collections from receivables were $224,037. 5. Uncollectible accounts expense was estimated to be 1 percent of the sales on account for the period. Required: 1. Organize the transaction data in accounts under an accounting equation. 2. Based on the preceding information, compute (after year-end adjustment): (1) Balance of Allowance for Doubtful Accounts at December 31, Year 3. (2) Balance of Accounts Receivable at December 31, Year 3 (3) Net realizable value of Accounts Receivable at December 31, Year 3. 3.…
Bourne Company had a $150,000 beginning balance in Accounts Receivable and a $6,000 credit balance in the Allowance for Doubtful Accounts. During the year, credit sales were $ 600,000 and customers' accounts collected were $590, 000. Also, $4,000 in worthless accounts were written off. What was the net amount of receivables included in the current assets at the end of the year, before any provision was made for doubtful accounts? Select one: A. $120,000 B. $130, 000 C. $126,000 D. $154,000
Renue Spa had the following balances as of December 31, Year 1: Accounts receivable was $61,000, allowance for doubtful accounts was $3,750 and total retained earnings at the end of Year 1 was $57,250. During Year 2 the company experienced the following events: 1. Accounts receivable in the amount of $2,100 were written off as uncollectible. 2. Collected $500 of receivables that had been written off in a previous accounting period. 3. Provided $215,000 worth of services on account during Year 2. 4. Cash collections from receivables were $218,000 during Year 2. 5. Uncollectible accounts expense was estimated to be 2 percent of the sales on account for the period. Required a. Organize the information in accounts under an accounting equation. b. Based on the preceding information, compute (after year-end adjustment): 1. Balance of allowance for doubtful accounts at December 31, Year 2. 2. Balance of accounts receivable at December 31, Year 2. 3. Net realizable value of accounts receivable…
A company is getting ready to publish their annual financial statements. They have the following beginning balances: Beginning balance for gross accounts receivable (A) $2,000 beginning balance for Allowance for doubtful accounts (XA) $300 assume that no cash collections were made during the accounting period and continue to assume that the $10,000 In credit sales were made in the current period. Suppose that 5% of accounts receivable are typically not collectible. If the balance sheet method is used, what are the reported (a.) bad debt expense and (b.) ending balance for the allowance for doubtful accounts?
Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 Sold $1,354,200 of merchandise on credit (that had cost $977,000), terms n/30. Wrote off $20,100 of uncollectible accounts receivable. Received $670,600 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.60% of accounts receivable would be uncollectible. Year 2 Sold $1,569,600 of merchandise (that had cost $1,341,800) on credit, terms n/30. Wrote off $32,600 of uncollectible accounts receivable. Received $1,225,700 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 1.60% of accounts receivable would be uncollectible. Required:Prepare journal entries to record Liang’s Year 1 and Year 2 summarized transactions and its year-end…