Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible. On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad Instructions (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016. (b) Show the balance sheet presentation of accounts receivable on December 31, 2016. (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make the appropriate entry to record the write-off of the Ahmad account. Also show the balance sheet presentation of accounts receivable before and after the write-off.

Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts receivable remain uncollected. The credit manager prepared an aging schedule of accounts receivable and estimates that $7,000 will prove to be uncollectible. On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad Instructions (a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016. (b) Show the balance sheet presentation of accounts receivable on December 31, 2016. (c) On March 4, before the write-off, assume the balance of Accounts Receivable account is $160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make the appropriate entry to record the write-off of the Ahmad account. Also show the balance sheet presentation of accounts receivable before and after the write-off.

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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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

Q2- Expand Furniture Store has credit sales of $400,000 in 2016 and a debit balance of $600 in
the Allowance for Doubtful Accounts at year end. As of December 31, 2016, $130,000 of accounts
receivable remain uncollected. The credit manager prepared an aging schedule of accounts
receivable and estimates that $7,000 will prove to be uncollectible.
On March 4, 2017, the credit manager authorizes a write-off of the $1,200 balance owed by Ahmad
Instructions
(a) Prepare the adjusting entry to record the estimated uncollectible accounts expense in 2016.
(b) Show the balance sheet presentation of accounts receivable on December 31, 2016.
(c) On March 4, before the write-off, assume the balance of Accounts Receivable account is
$160,000 and the balance of Allowance for Doubtful Accounts is a credit of $3,000. Make
the appropriate entry to record the write-off of the Ahmad account. Also show the balance
sheet presentation of accounts receivable before and after the write-off.

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