EXERCISE 8-2At May 31, the accounts receivable of Biway Central amounted in total to$705,600. The company uses the balance sheet approach to estimate bad debts andhas prepared an aging schedule of accounts receivable at May 31 which indicatesan expected loss of $17,568. You are to' prepare as of May 31 the adjusting entryrequired under each of the following independent assumptions. The explanationportion of each entry should include, appropriate supporting computations, andamounts should be rounded to the nearest. dollar.Accounting forUncollectibleAccounts--The"BalanceSheet" MethodaThe Allowance for Doubtful Accounts has a credit balance of $12,672.bb The Allowance for Doubtful Accounts has a debit balance of $4,262.

Doubtful accounts are those accounts to whom business has made credit sales, but it is not sure that…

Answered: EXERCISE 8-2 At May 31, the accounts…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter8: Receivables

Section: Chapter Questions

Problem 8.18EX: Entries for bad debt expense under the direct write-off and allowance methods Seaforth International...

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Aging of receivables schedule The accounts receivable clerk for Waddell industries prepared the following partially completed aging of receivables schedule as of the end of business on August 31: The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals: Customer Balance Due Date Builders Industries 544,500 May 1 Eikhorn Company 21,000 June 20 Granite Creek Inc. 7,500 July 13 Lockwood Company 14,000 September 0 Teton Company 13.000 August 7 a. Determine the number of days past due for each of the preceding accounts as of August 31. b. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
Aging of receivables; estimating allowance for doubtful accounts Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y7: The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair Nail, which is due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 10,000 Creative Images Oct. 30 8,500 Excel Hair Products July 3 7,500 First Class Hair Care Sept. 8 6,600 Golden Images Nov. 23 3,600 Oh That Hair Nov. 29 1,400 One Stop Hair Designs Dec. 7 4,000 Visions Hair Nail Jan. 11 9,000 Wig Creations has a past history of uncollectible accounts by age category, as follows Age Class Percent Uncollectible Not past due 1% 1-30 days past due 4 31-60 days past due 16 61 -90 days past due 25 91-120 days past due 40 Over 120 days past due 80 Instructions 1. Determine the number of days past due for each of the preceding accounts. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of 7,375 before adjustment on December 31. Journalize the adjustment for uncollectible accounts. 5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?
Adjustment for uncollectible accounts Using data in Exercise 9-9, assume that the allowance for doubtful accounts for Waddell Industries has a credit balance of 6,350 before adjustment on August 31. Journalize the adjusting entry for uncollectible accounts as of August 31. Reference: EX 9-9 Estimating allowance for doubtful accounts OBJ. 4 Waddell Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8. Age Class Percent Uncollectible Not past due 3% 1-30 days past due 4 31-60 days past due 15 61-90 days past due 35 Over 90 days past due 80 EX 9-8 Aging of receivables schedule OBJ. 4 The accounts receivable clerk for Waddell Industries prepared the following partially completed aging of receivables schedule as of the end of business on August 31: The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals: Customer Balance Due Date Builders Industries 44,500 May 1 Elkhorn Company 21,000 June 20 Granite Creek Inc. 7,500 July 13 Lockwood Company 14,000 September 9 Teton Company 13,000 August 7 a. Determine the number of days past due for each of the preceding accounts as of August 31. b. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.

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