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Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis LO6-2 Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,500; (2) up to 120 days past due, $7,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 10 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $740 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: a. During December, an Account Receivable (Patty's Bake Shop) of $690 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, the appropriate adjusting entry for the year was recorded. Required: 1. Give the required journal entries for the two items listed above. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet for the current year. Disregard income tax considerations. (Amounts to be deducted should be indicated by a minus sign.) Drov

Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis LO6-2 Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,500; (2) up to 120 days past due, $7,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 10 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $740 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: a. During December, an Account Receivable (Patty's Bake Shop) of $690 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, the appropriate adjusting entry for the year was recorded. Required: 1. Give the required journal entries for the two items listed above. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet for the current year. Disregard income tax considerations. (Amounts to be deducted should be indicated by a minus sign.) Drov

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...
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Saved Help Save & Exit Check E6-23 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis LO6-2 Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,500; (2) up to 120 days past due, $7,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 10 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $740 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: a. During December, an Account Receivable (Patty's Bake Shop) of $690 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, the appropriate adjusting entry for the year was recorded. Required: 1. Give the required journal entries for the two items listed above. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Reg 2B Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet for the current year. Disregard income tax considerations. (Amounts to be deducted should be indicated by a minus sign.) < Prev 9 of 9 Next cearch 55°F Mostly cloudy 立
Transcribed Image Text:Saved Help Save & Exit Check E6-23 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using Aging Analysis LO6-2 Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $14,500; (2) up to 120 days past due, $7,500; and (3) more than 120 days past due, $2,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 10 percent, and (3) 30 percent, respectively. At December 31 (end of the current year), the Allowance for Doubtful Accounts balance is $740 (credit) before the end-of-period adjusting entry is made. Data during the current year follow: a. During December, an Account Receivable (Patty's Bake Shop) of $690 from a prior sale was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, the appropriate adjusting entry for the year was recorded. Required: 1. Give the required journal entries for the two items listed above. 2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Reg 2B Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet for the current year. Disregard income tax considerations. (Amounts to be deducted should be indicated by a minus sign.) < Prev 9 of 9 Next cearch 55°F Mostly cloudy 立
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