SCENARIO #1 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2019, what is the company's net realizable value? 12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For end of 2020, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2020, what is the company's net realizable value?

SCENARIO #1 12/31/2019: At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For the end of 2019, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2019, what is the company's net realizable value? 12/31/2020: During 2020, S10,000 in accounts receivable were written off. At the end of the second year of operations, Yolandi Company had $1,000,000 in sales and accounts receivable of $400,000. Yolandi's management has estimated that 1.5% of sales will be uncollectible. For end of 2020, after the adjusting entry for bad debts was journalized, what is the balance in the following accounts: Bad debt expense Allowance for doubtful accounts For the end of 2020, what is the company's net realizable value?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...

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Clovis Enterprises reports $845,500 in credit sales for 2018 and $933,000 in 2019. It has a $758,000 accounts receivable balance at the end of 2018 and $841,000 at the end of 2019. Clovis uses the income statement method to record bad debt estimation at 4% during 2018. To manage earnings more favorably, Clovis changes bad debt estimation to the balance sheet method at 5% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Clovis Enterprises in 2019 as a result of its earnings management.
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McKinney Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of 1,500,000 in 2019. McKinney estimates 2.5% of its sales will be uncollectible. Prepare the journal entry to record bad debt expense for McKinney at the end of 2019.
Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton Corporations accounting records at the beginning of 2019: During 2019, sales on credit amounted to 575,000, 557,400 was collected on outstanding receivables and 2,600 of receivables were written off as uncollectible. On December 31, 2019, Shell on estimastes its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Sheltons estimate of bad debt expense for 2019. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2019, balance sheet. 3. Compute Shelton's receivables turnover. (Round to one decimal place.) 4. It Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods? A. $3,100 B. $13,800 C. $10,700 D. $77,500
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At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.
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Estimating Bad Debts Keegan Corporations accounting records disclosed the following information for 2019: Keegan wishes to examine the effect of various alternative had debt estimation policies. Required: 1. Prepare the adjusting entry that would be required under each of the following methods: a. Bad debts are estimated at 3% of net credit sales. b. Bad debts are estimated at 7.5% of gross accounts receivable. c. An aging of accounts receivable indicates that half of the outstanding accounts will incur a 3% loss, a quarter will incur a 6% loss, the remaining quarter will incur a 20% loss. 2. Next Level Discuss the difference between the income statement and balance sheet approaches to estimating bad debts.
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts receivable for the year, and $773,270 in credit sales. The uncollectible percentage is 3.2%. On November 22, Millennium Associates identifies one uncollectible account from Angels Hardware in the amount of $3,650. On December 18, Angels Hardware unexpectedly pays its account in full. Record journal entries for the following. A. Year-end adjusting entry for 2017 bad debt B. November 22, 2018 identification entry C. Entry for payment on December 18, 2018