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Instructions X. Cowen's, a large department store located in a metropolitan area, has been experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad debts by the due dates of its receivables. This analysis discloses the following information: Balance Age of Receivable Estimated Percentage Uncollectible $194,000 Under 30 days 0.8% 119,000 30-60 days 2.0% 73,000 61-120 days 5.0% 41,000 121-240 days 20.0% 25,000 241-360 days 35.0% 19,000 Over 360 days 60.0% $471,000 Required: 1. Use the preceding analysis to compute the estimated amount of uncollectible receivables. 2. What is the net realizable value of Cowen's accounts receivable? 3. Prepare the joumal entry to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is: A. O B. $3, 100 (debit) C. S2.500 (credit)

Instructions X. Cowen's, a large department store located in a metropolitan area, has been experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad debts by the due dates of its receivables. This analysis discloses the following information: Balance Age of Receivable Estimated Percentage Uncollectible $194,000 Under 30 days 0.8% 119,000 30-60 days 2.0% 73,000 61-120 days 5.0% 41,000 121-240 days 20.0% 25,000 241-360 days 35.0% 19,000 Over 360 days 60.0% $471,000 Required: 1. Use the preceding analysis to compute the estimated amount of uncollectible receivables. 2. What is the net realizable value of Cowen's accounts receivable? 3. Prepare the joumal entry to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is: A. O B. $3, 100 (debit) C. S2.500 (credit)

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter9: Receivables
Section: Chapter Questions
Problem 12E: Using the data in Exercise 9-11, assume that the allowance for doubtful accounts for Selbys Bike Co....
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Instructions (X) Chart of Accounts (X) General Journal 3a. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts Cowen's, a large department store located in a metropolitan area, has been prior to adjustment is $0. CHART OF ACCOUNTS experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad Cowen's General Journal Instructions debts by the due dates of its receivables. This analysis discloses the following General Ledger information: ASSETS REVENUE PAGE 1 Balance Age of Receivable Estimated Percentage Uncollectible 111 Cash 411 Sales Revenue GENERAL JOURNAL $194,000 Under 30 days 0.8% 121 Accounts DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Receivable EXPENSES 119,000 30-60 days 2.0% 1 122 Allowance for 500 Cost of Goods 73,000 61-120 days 5.0% 2 Doubtful Accounts Sold 41,000 121-240 days 20.0% 141 Inventory 511 Insurance 25,000 241-360 days 35.0% 152 Prepaid Expense 3b. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts Insurance 512 Utilities Expense 19,000 Over 360 days 60.0% prior to adjustment is a $3,100 debit. 181 Equipment 521 Salaries $471,000 198 Accumulated Expense Depreciation 532 Bad Debt General Journal Instructions Required: Expense 1. Use the preceding analysis to compute the estimated amount of LIABILITIES 540 Interest Expense PAGE 1 uncollectible receivables. 211 Accounts Payable 541 Depreciation 2. What is the net realizable value of Cowen's accounts receivable? GENERAL JOURNAL 231 Salaries Payable Expense 3. Prepare the journal entry to record Cowen's estimated uncollectibles, 250 Unearned 559 Miscellaneous DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT assuming the balance in Allowance for Doubtful Accounts prior to Revenue Expenses adjustment is: 910 Income Tax 261 Income Taxes 2 A. O Payable Expense В. $3,100 (debit) C. $2,500 (credit) Analysis 3c. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is a $2,500 credit. 1. Use the Aging analysis to compute the estimated amount of uncollectible receivables. General Journal Instructions The estimated amount uncollectible based on the data provided is $ PAGE 1 2. What is the net realizable value of Cowen's accounts receivable? GENERAL JOURNAL Net realizable value of accounts receivable $ DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
Transcribed Image Text:Instructions (X) Chart of Accounts (X) General Journal 3a. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts Cowen's, a large department store located in a metropolitan area, has been prior to adjustment is $0. CHART OF ACCOUNTS experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad Cowen's General Journal Instructions debts by the due dates of its receivables. This analysis discloses the following General Ledger information: ASSETS REVENUE PAGE 1 Balance Age of Receivable Estimated Percentage Uncollectible 111 Cash 411 Sales Revenue GENERAL JOURNAL $194,000 Under 30 days 0.8% 121 Accounts DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Receivable EXPENSES 119,000 30-60 days 2.0% 1 122 Allowance for 500 Cost of Goods 73,000 61-120 days 5.0% 2 Doubtful Accounts Sold 41,000 121-240 days 20.0% 141 Inventory 511 Insurance 25,000 241-360 days 35.0% 152 Prepaid Expense 3b. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts Insurance 512 Utilities Expense 19,000 Over 360 days 60.0% prior to adjustment is a $3,100 debit. 181 Equipment 521 Salaries $471,000 198 Accumulated Expense Depreciation 532 Bad Debt General Journal Instructions Required: Expense 1. Use the preceding analysis to compute the estimated amount of LIABILITIES 540 Interest Expense PAGE 1 uncollectible receivables. 211 Accounts Payable 541 Depreciation 2. What is the net realizable value of Cowen's accounts receivable? GENERAL JOURNAL 231 Salaries Payable Expense 3. Prepare the journal entry to record Cowen's estimated uncollectibles, 250 Unearned 559 Miscellaneous DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT assuming the balance in Allowance for Doubtful Accounts prior to Revenue Expenses adjustment is: 910 Income Tax 261 Income Taxes 2 A. O Payable Expense В. $3,100 (debit) C. $2,500 (credit) Analysis 3c. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is a $2,500 credit. 1. Use the Aging analysis to compute the estimated amount of uncollectible receivables. General Journal Instructions The estimated amount uncollectible based on the data provided is $ PAGE 1 2. What is the net realizable value of Cowen's accounts receivable? GENERAL JOURNAL Net realizable value of accounts receivable $ DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
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