During the current year, Witz Electric, Inc., recorded credit sales of $800,000. Based on prior experience, it estimates a 2 percent baddebt rate on credit sales.Required:Prepare journal entries for each transaction: (lf no entry is required for a transaction/event, select "No journal entry required" in thefirst account field.)a. On September 29 of the current year, an account receivable for $3,000 from March of the current year was determined to beuncollectible and was written off.b. The appropriate bad debt expense adjustment was recorded for the current year.View transaction listJournal entry worksheet2Record the entry to write-off the uncollectible accountNote: Enter debits before credits.DebitTransactionGeneral JournalCreditа.A

Bad debt expenses are charged to Income statement on the basis of expected percentage at the end of…

Answered: During the current year, Witz Electric,…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 43P

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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.
Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit sales will be uncollectible. Allowance for Doubtful Accounts has a credit balance of 275. Prepare the adjusting entry at year-end for the estimated bad debt expense. (a) Based on an aging of its accounts receivable, Kyles Cyclery estimates that 3,200 of its year-end accounts receivable will be uncollectible. Allowance for Doubtful Accounts has a debit balance of 280 at year-end. Prepare the adjusting entry at year-end for the estimated uncollectible accounts.
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: a. Journalize the write-offs under the direct write-off method. b. Journalize the write-offs under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded 5,250,000 of credit sales during the year. Based on past history and industry averages, % of credit sales are expected to be uncollectible. c. How much higher (lower) would Casebolt Companys net income have been under the direct write-off method than under the allowance method?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
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.
Olena Mirrors records bad debt using the allowance, balance sheet method. They recorded $343,160 in accounts receivable for the year and $577,930 in credit sales. The uncollectible percentage is 4.4%. On June 11, Olena Mirrors identifies one uncollectible account from Nadia White in the amount of $4,265. On September 14, Nadia Chernoff unexpectedly pays $1,732 toward her account. Record journal entries for the following. A. Year-end adjusting entry for 2017 bad debt B. June 11, 2018 identification entry C. Entry for payment on September 14, 2018
Last year, Tobys Hats had net sales of 45,000,000 and cost of goods sold of 29,000,000. Tobys had the following balances: Refer to the information for Tobys on the previous page. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yangs Gift Shop was 30,000. Credit sales for the year were 355,200. REQUIRED Make the necessary adjusting entry in general journal form under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value. 1. Allowance for Doubtful Accounts has a credit balance of 330. (a) The percentage of sales method is used and bad debt expense is estimated to be 2% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 6,950 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 400. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 5,685 in uncollectible accounts.
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
Martel Co. has 320,000 in Accounts Receivable on December 31, 20-1, the end of its first year of operations. The business is new, so it has no prior experience with uncollectible accounts. In Martels overall industry, the percentage of uncollectible accounts receivable is about 3%. For companies similar to Martel in size and operations, the percentage is about 5%. Martel decides to use the overall industry experience as the basis for its estimate of uncollectible accounts. Prepare the adjusting entry on December 31, 20-1 for Martel Co.s uncollectible accounts.

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