Estimating Uncollectible Accounts and Reporting Accounts ReceivableCollins Company analyzes its accounts receivable at December 31, and arrives at the aged categories below along with the percentages that are estimated as uncollectible. Age Group Accounts Receivable Estimated Loss % 0-30 days past due $110,000 1% 31-60 days past due 40,000 2 61-120 days past due 27,000 5 121-180 days past due 14,000 10 Over 180 days past due 9,000 25 Total accounts receivable $200,000 The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments. (a) What amount of bad debts expense will Collins report in its income statement for the year?$Answer? (b) Use the financial statement effects template to record Collin's bad debts expense for the year. Use negative signs with your answers, when appropriate. Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Record bad debts expense Answer Answer Answer Answer Answer Income Statement Revenue - Expenses = Net Income Answer Answer Answer (c) What is the balance of accounts receivable on it December 31 balance sheet?$Answer?
Bad Debts
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.
Estimating Uncollectible Accounts and Reporting Accounts Receivable
Collins Company analyzes its accounts receivable at December 31, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
|
Age Group |
Accounts Receivable |
Estimated Loss % |
|---|---|---|
| 0-30 days past due | $110,000 | 1% |
| 31-60 days past due | 40,000 | 2 |
| 61-120 days past due | 27,000 | 5 |
| 121-180 days past due | 14,000 | 10 |
| Over 180 days past due | 9,000 | 25 |
| Total accounts receivable | $200,000 |
The balance of the allowance for uncollectible accounts is $1,100 on December 31, before any adjustments.
(a) What amount of
$Answer?
(b) Use the financial statement effects template to record Collin's bad debts expense for the year.
Use negative signs with your answers, when appropriate.
|
Balance Sheet
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||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + |
Noncash Assets |
= | Liabilities | + |
Contributed Capital |
+ |
Earned Capital |
|
| Record bad debts expense | Answer
|
Answer
|
Answer
|
Answer
|
Answer
|
|
Income Statement
|
||||
|---|---|---|---|---|
Revenue |
- |
Expenses |
= |
Net Income |
| Answer
|
Answer
|
Answer
|
(c) What is the balance of accounts receivable on it December 31 balance sheet?
$Answer?
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