MAKE THE REQUIRED ENTRIES 5,000,000 2 A/R BALANCE @12/31/2008 RESERVE FOR BAD DEBT IS 1% OF THE ENDING A/R BALANCE TO SET UP THE RESERVE FOR EACH CASE CASE 1 0 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008 t CASE 2 40,000 CREDIT ALLOW FOR DOUBTFUL ACCTS BAL @12/31/2008 10,000 DEBIT CASE 3 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008

MAKE THE REQUIRED ENTRIES 5,000,000 2 A/R BALANCE @12/31/2008 RESERVE FOR BAD DEBT IS 1% OF THE ENDING A/R BALANCE TO SET UP THE RESERVE FOR EACH CASE CASE 1 0 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008 t CASE 2 40,000 CREDIT ALLOW FOR DOUBTFUL ACCTS BAL @12/31/2008 10,000 DEBIT CASE 3 ALLOW FOR DOUBTFUL ACCTS BAL @ 12/31/2008

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 5MC: Tines Commerce computes bad debt based on the allowance method. They determine their current years...

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Tines Commerce computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $45,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $12,000. What should be the reported figure in the adjusting entry for the current period? A. $12,000 B. $45,000 C. $33,000 D. $57,000
At 30th June 2018 a company’s provision for doubtful debts was £78,000. At 30th June 2019 debtors (receivables) totalled £1,034,000. It was decided to write off debts totalling £74,000 and to adjust the provision to the equivalent of 5% of remaining debtors (receivables). What figure should appear in the income statement for bad and doubtful debts expense for the year ended 30 June 2019? £74,000 £44,000 £47,700 £104,000
1. Agogo Trading has the following account balances as at 30 June 2019.RMAccount Receivable 200,000Provision for doubtful debt 6,000On 30 June 2019, the following adjustment have to be made:i. Debts of RM500 are to be written off as badii. One of the entities with accounts receivable whose debts had previously been written off as bad sent a cheque for RM1,000 in full settlement of the amount owed iii. Provision for doubtful debts is 2% of the outstanding accounts receivables Required:For the year ending 30 June 2019 show the:a) Provision for doubtful debts accountb) Statement of Profit or Loss (extract)c) Statement of Financial Position (extract) 2. The following is a summary of account receivable and related accounts for threeyears for Tommy Enterprise the financial year ends 30 April each year.Year ended 30 AprilAccount receivable as at 30 April (before writing off bad debts)RMBad debts written offRMProvision for doubtful debt2017 70,000 Nil 2%2018 61,000 1,000 2%2019 83,000…
D borrowed from XYZ Bank P2,000,000.00 payableat the end of 5 years. Before maturity, anextraordinary deflation supervened causing the valueof the debt to rise to P5,000,000.00 on the date ofmaturity. On due date, B must pay XYZ Bank:a. P2,000,000.00b. P5,000,000.00c. P800,000.00d. P20,000,000.00
Crane Company had a 1/1/20 balance in the Allowance for Doubtful Accounts of $33500. During 2020, it wrote off $22000 of accounts and collected $6620 on accounts previously written off. The balance in Accounts Receivable was $630000 at 1/1 and $730000 at 12/31. At 12/31/20, Crane estimates that 5% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2020? $18380. $25000. $3000. $36500.
3. The following balances have been taken from the unadjusted trial balance of a tradingorganization for the year ended Dec. 31, 2020:Sales (All on credit) Rs. 650,000Sales Return and Allowance (All from credit sales) 20,000Sales Discount 10,000Accounts Receivable 430,000Allowance for bad debt (Cr.) 2000Required:Record and close bad debt expense for the year ended Dec. 31, 2020 under each of the followingassumptions separately:a. Allowance for bad debt was estimated @ 10% of accounts receivable.b. Bad debt expense was estimated @ 1.5% of net credit sales.
Noren Company uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. 0-30 dayspast due 31-90 dayspast due Over 90 dayspast due Accounts receivable amount $160,000 $85,000 $65,500 Percent uncollectible 7% 20% 40% Total per category ? ? ? Total uncollectible ? To manage earnings more favorably, Noren Company considers changing the past-due categories as follows. 0-60 dayspast due 61-120 dayspast due Over 120 dayspast due Accounts receivable amount $160,000 $50,500 $55,000 Percent uncollectible 7% 20% 40% Total per category ? ? ? Total uncollectible ? A. Complete each table by filling in the blanks. 0-30 dayspast due 31-90 dayspast due Over 90 dayspast due Accounts receivable Amount $160,000…
The following information pertains to Mane Lending Corporation’s loan portfolio as at December 31, 2021: A. Mane Lending Corporation considers all loans over 90 days past due to be credit-impaired based on historical experience with recovering the associated debt. B. The aging of Mane Lending Corporation’s loan on December 31, 2021 is a follows: Current P 1,400,000 More than 30 days past due 75,000 More than 60 days past due 100,000 More than 90 days past due 125,000 Total P 1,700,000 C. Mane Lending Corporation monitors certain loans more closely on an individual basis given their significance and unique characteristics. These loans are not included in the P1,700,000 loan portfolio. The following information is available without undue cost or effort on an individual loan basis: LOAN AMOUNT PAST DUE STATUS PV OF EXPECTED FUTURE CASH FLOWS 1 P 200,000 90 days P…
37-a At the end of the operating period, a rediscount of 7.500 TL has been calculated for the debt securities. Accordingly, which of the following accounts is correct to use in the posting to be made at the end of the period ? a) 321 Debt Securities Hs. Credited 7.500 TL B) 647 Rediscount Interest Income Hs. Creditor 7.500 TL NS) 657 Rediscount Interest Expenses Hs. Borrower 7.500 TL D) 647 Rediscount Interest Income Hs. Borrower 7.500 TL TO) 321 Debt Securities Hs. Borrower 7.500 TL
On January 1, 2020, the company issued $2,500,000 6% bonds with a 10-year maturity. The bonds were issued to investors that require an effective interest rate of 8%. Interest is paid annually and the accountant did not record the interest payment transaction. The effective interest method is used to amortized any premium or discount. Would the PV calculation be PV: ? 2,164,496 rate: 6% Pmt: 150,000 FV: 2,500,000 type: 0
Apply derecognition criteria of IFRS 9 and U.S. GAAP to Company B’s situation below: Company B sells a portfolio of 100 short-term receivables to a bank for cash by guaranteeing to buy back first 20 defaulted receivables at the amount due from the debtors. The historical default rates on such receivables are up to 10%. The customers are notified of the sale and pay directly to the bank. The bank may subsequently sell or pledge these receivables. Under IFRS, should Company B derecognize this portfolio of short-term receivables? Why? Under U.S. GAAP, should Company B derecognize this portfolio of short-term receivables? Why?
If a 10 percent note receivable for $10,000 is created onJanuary 1, 2015, and it has a maturity date of December31, 2018,a. No interest revenue will be recorded in 2015.b. The note receivable will be classified as a current asset.c. Interest Revenue of $1,000 will be recorded in 2015.d. None of the above.