Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a balance of $1,073,000 and sales for the year total $12,170,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following independent assumptions: a. The allowance account before adjustment has a negative balance of $(14,500). Bad debt expense is estimated at 1/4 of 1% of sales. 30,425 V b. The allowance account before adjustment has a negative balance of $(14,500). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $46,400. 31,900✔ c. The allowance account before adjustment has a positive balance of $5,400. Bad debt expense is estimated at 3/4 of 1% of sales. 91,275 V d. The allowance account before adjustment has a positive balance of $5,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $44,800. 50,200

Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a balance of $1,073,000 and sales for the year total $12,170,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following independent assumptions: a. The allowance account before adjustment has a negative balance of $(14,500). Bad debt expense is estimated at 1/4 of 1% of sales. 30,425 V b. The allowance account before adjustment has a negative balance of $(14,500). An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $46,400. 31,900✔ c. The allowance account before adjustment has a positive balance of $5,400. Bad debt expense is estimated at 3/4 of 1% of sales. 91,275 V d. The allowance account before adjustment has a positive balance of $5,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $44,800. 50,200

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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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.
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