hi Can you assist me in undertanding better how you calculated the written off amount ?Why is the formula addind the opening and closing balance of the allowance for doubtful accounts and substract the allowance estimated ?You mentionned the bad debt was equal to total estimated allowance for doubtful accounts- balance in allowance for doubtful account . Is this the same formula to use for the write off ? Many thanks P6-2For several years, EquiPrime Co.'s sales have been on a "cash only" basis. On January 1,20Y2, however, EquiPrime Co. began offering credit on terms of n/30. The amount of theadjusting entry to record the estimated uncollectible receivables at the end of each yearhas been % of 1% of credit sales, which is the rate reported as the average for the industry.Credit sales and the year-end credit balances in Allowance for Doubtful Accounts for thepast four years are as follows:0.250.01additionalAllowance fordoubtful accountsallowance forCredit salesbeginningAllowance for doubtful account ending doubtfulldebt)Written off each year2002125000001280031250-1845020031260000012800230003150043002004128000002300034000320002500020051300000034000490003250050500

For your understanding its better to prepare a ledger account for every year and then understand the…

Answered: hi Can you assist me in undertanding…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 4PB: Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts...

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hi Can you assist me in undertanding better how you calculated the written off amount ? Why is the formula addind the opening and closing balance of the allowance for doubtful accounts and substract the allowance estimated ? You mentionned the bad debt was equal to total estimated allowance for doubtful accounts- balance in allowance for doubtful account . Is this the same formula to use for the write off ? Many thanks

P6-2
For several years, EquiPrime Co.'s sales have been on a "cash only" basis. On January 1,
20Y2, however, EquiPrime Co. began offering credit on terms of n/30. The amount of the
adjusting entry to record the estimated uncollectible receivables at the end of each year
has been % of 1% of credit sales, which is the rate reported as the average for the industry.
Credit sales and the year-end credit balances in Allowance for Doubtful Accounts for the
past four years are as follows:
0.25
0.01
additional
Allowance for
doubtful accounts
allowance for
Credit sales
beginning
Allowance for doubtful account ending doubtfulldebt)
Written off each year
2002
12500000
12800
31250
-18450
2003
12600000
12800
23000
31500
4300
2004
12800000
23000
34000
32000
25000
2005
13000000
34000
49000
32500
50500

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