PROBLEMS Problem 5-1 (IAA) Marvelous Company reported the following information before adjustments at year-end: 500,000 200,000 Accounts receivable Notes receivable Allowance for doubtful accounts Sales Sales return and allowances Sales discount 20,000 5,000,000 30,000 20,000 Required: Prepare adjusting entry to provide for doubtful accounts under each of the following independent assumptions: a. Past experience indicates that 75% of all sales are credit sales and that an average 2% of credit sales may prove uncollectible. b. One percent of gross sales may prove uncollectible. c. An analysis of the aging of trade receivables indicates that accounts receivable in the amount of P80,000 may prove uncollectible. d. The policy is to maintain an allowance for doubtful accounts equal to 10% of the outstanding accounts receivable.

PROBLEMS Problem 5-1 (IAA) Marvelous Company reported the following information before adjustments at year-end: 500,000 200,000 Accounts receivable Notes receivable Allowance for doubtful accounts Sales Sales return and allowances Sales discount 20,000 5,000,000 30,000 20,000 Required: Prepare adjusting entry to provide for doubtful accounts under each of the following independent assumptions: a. Past experience indicates that 75% of all sales are credit sales and that an average 2% of credit sales may prove uncollectible. b. One percent of gross sales may prove uncollectible. c. An analysis of the aging of trade receivables indicates that accounts receivable in the amount of P80,000 may prove uncollectible. d. The policy is to maintain an allowance for doubtful accounts equal to 10% of the outstanding 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 5SEB: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current...

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Estimating allowance for doubtful accounts Evers 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 8-8.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF RECEIVABLES Britos Hundai Sales and Service estimates the amount of uncollectible accounts using the percentage of receivables method. Based on aging the accounts, it is estimated that 4,500 will not be collected. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 710. 2. Allowance for Doubtful Accounts has a debit balance of 305.
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. 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. 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: 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 ACCOUNTS RECEIVABLE An analysis of the accounts receivable of Johnson Company as of December 31, 20--, reveals the following: REQUIRED 1. Prepare an aging schedule as of December 31, 20--, by adding the following column to the three columns shown above: Estimated Amount Uncollectible. 2. Assuming that Allowance for Doubtful Accounts had a credit balance of 620 before adjustment, record the end-of-period adjusting entry in general journal form to enter the estimate for uncollectible accounts.
UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF RECEIVABLES Charlies Chevy Sales and Service estimates the amount of uncollectible accounts using the percentage of receivables method. Based on aging the accounts, it is estimated that 3,935 will not be collected. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 245. 2. Allowance for Doubtful Accounts has a debit balance of 560.
AGING ACCOUNTS RECEIVABLE An analysis of the accounts receivable of Matsushita Company as of December 31, 20--, reveals the following: REQUIRED 1. Prepare an aging schedule as of December 31, 20--, by adding the following column to the three columns shown above: Estimated Amount Uncollectible. 2. Assuming that Allowance for Doubtful Accounts had a credit balance of 1,750 before adjustment, record the end-of-period adjusting entry in general journal form to enter the estimate for uncollectible accounts.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Parkers Nursery Supplies has a debit balance of 350,000. Credit sales are 2,300,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 1,920. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 24,560 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 1,280. (a) The percentage of sales method is used and bad debt expense is estimated to be of 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 22,440 in uncollectible accounts.
Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. The balance in Glencoes allowance for doubtful accounts at the beginning of the year was $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off. Required: 1. Determine bad debt expense. 2. Prepare the journal entry to record bad debt expense. 3. If Glencoe had written off $90,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed?
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
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the end of the current year, the accounts receivable account of Glenns Nursery Supplies has a debit balance of 390,000. Credit sales are 2,800,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 1,760. (a) The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 30,330 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 1,900. (a) The percentage of sales method is used and bad debt expense is estimated to be of 1% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 29,890 in uncollectible accounts.