Grace Company is using 0.05% of sales to compute its quarterly doubtful accounts. Sales for the 1t-4th quarters are as follows: P5,000,000, P6,000,000, P7,000,000 and P8,000,000 which were the basis of the accountant in recording the quarterly doubtful accounts. Before the publication of the 4th quarter interim reports, the auditor of the company estimated that the doubtful accounts for the year should be P50,000 using aging of accounts receivable.

Grace Company is using 0.05% of sales to compute its quarterly doubtful accounts. Sales for the 1t-4th quarters are as follows: P5,000,000, P6,000,000, P7,000,000 and P8,000,000 which were the basis of the accountant in recording the quarterly doubtful accounts. Before the publication of the 4th quarter interim reports, the auditor of the company estimated that the doubtful accounts for the year should be P50,000 using aging of accounts receivable.

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 2CP

See similar textbooks

Similar questions

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.
XYZ Company prepared quarterly interim financial statements and used the percentage credit sales method in computing doubtful accounts. The credit sales for the first, second third and fourth quarters totaled P2.000.000, P1.500.000, P3.500.000 and P4.000.000 respectively. The doubtful account percentages for the first, second, third and fourth quarters effective for the entire year are 2%, 2%, 4%, and 5% respectively. What amount of doubtful accounts expense should be recognized in the fourth quarter income statement? 550,000 270,000 200,000 137,000
A company had sales of $60,400 and cost of goods sold of $15,200 for the period. The company uses the percentage of sales method and estimates 3% of sales will result in uncollectible accounts. Before the end of period adjustment is made, the allowance for doubtful accounts has a debit balance of $440. After making the adjustment for Bad Debt Expense, what is the amount of the ending balance in the Allowance for Doubtful accounts? $______
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $1,058,000 and sales for the year total $12,000,000. The allowance account before adjustment has a debit balance of $14,300. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a debit balance of $14,300. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $45,800. The allowance account before adjustment has a credit balance of $9,200. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a credit balance of $9,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $76,400. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above.
At the end of the current year, the accounts receivable account has a balance of $2,875,000 and sales for the year total $34,500,000. Determine the amount of the adjustment to provide for doubtful accounts under each of the following independent assumptions: a. The allowance account before adjustment has a negative balance of $(18,500). Bad debt expense is estimated at ½ of 1% of sales. The allowance account before adjustment has a negative balance of $(18,500). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $200,000.$fill in the blank 2 c. The allowance account before adjustment has a positive balance of $9,000. Bad debt expense is estimated at ¾ of 1% of sales.$fill in the blank 3 d. The allowance account before adjustment has a positive balance of $9,000. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $255,000.
Providing for doubtful accounts At the end of the current year, the accounts receivable account has a debit balance of $1,935,000 and sales for the year total $26,710,000. The allowance account before adjustment has a debit balance of $10,200. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a debit balance of $10,200. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $175,000. The allowance account before adjustment has a credit balance of $25,760. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a credit balance of $25,760. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $170,420. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. Assumption Amount a. $fill in the blank 1 b. $fill in the blank 2 c. $fill in the blank…
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $807,000 and sales for the year total $9,150,000. The allowance account before adjustment has a debit balance of $10,900. Bad debt expense is estimated at 1/4 of 1% of sales. The allowance account before adjustment has a debit balance of $10,900. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $34,900. The allowance account before adjustment has a credit balance of $6,600. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a credit balance of $6,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $54,800.
Doll Company provided the following data for the current year:Allowance for doubtful accounts- January 1, 180,000Sales 9,500,000Sales returns and allowances 800,000Sales discounts 200,000Accounts written off as uncollectible 200,000The entity provided for doubtful accounts expense at the rate of 3% of net sales. What is the allowance for doubtful accounts at year-end?
Assume that Simple Co. had credit sales of $259,000 and cost of goods sold of $159,000 for the period. Simple uses the aging method and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,900. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $340. What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
Providing for Doubtful Accounts at the end of the year, the accounts receivable account has a debit balance of $851,000 and sales for the year total $9,650,000. A.the allowance account before adjustment has a credit balance of $11,500. Bad debt expense is estimated at 1/2 of 1% of sales. B.the allowance account before adjustment has a credit balance of $11,500. An agent of the accounts in the customer's Ledger indicates estimated doubtful accounts of $36,800. C. The allowance account before adjustment has a debit balance of $5,200. Bad Debt is estimated at 3/4 of 1% of sales. D.the allowance account before adjustment has a debit balance of $5,200. An agent of the accounts in the customer Ledger indicates estimated doubtful accounts of $43,200. determine the amount of the adjusted entry to provide for doubtful accounts under each of the assumptions(a through d) listed above. A.$ ____ B.$ _____ C.$ _____ D.$ _______
At the end of the current year, the accounts receivable account has a debit balance of $821,000 and sales for the year total $9,310,000. The allowance account before adjustment has a debit balance of $11,100. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a debit balance of $11,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $35,500. The allowance account before adjustment has a credit balance of $6,500. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a credit balance of $6,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $54,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. $ b. $ c. $ d. $
Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $636,000 and sales for the year total $7,220,000. The allowance account before adjustment has a debit balance of $8,600. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a debit balance of $8,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $27,500. The allowance account before adjustment has a credit balance of $6,100. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a credit balance of $6,100. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $50,600. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. a. $fill in the blank 1 b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4