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 Martel’s 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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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756
BuyFind

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
Publisher: Cengage Learning,
ISBN: 9781337794756

Solutions

Chapter
Section
Chapter 16, Problem 3CP
Textbook Problem

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.

  1. (a) Estimate Martel’s uncollectible accounts percentage based on its actual bad debt experience during the past two years.
  2. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.’s uncollectible accounts.

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Chapter 16 Solutions

College Accounting, Chapters 1-27
Ch. 16 - Beamon Department Store has an Accounts Receivable...Ch. 16 - Tonis Tech Shop has total credit sales for the...Ch. 16 - Fionas Pharmacy uses the direct write-off method...Ch. 16 - What method of accounting for uncollectible...Ch. 16 - Describe the steps to follow when using the...Ch. 16 - Explain how to compute net realizable value.Ch. 16 - Describe the process followed when estimating bad...Ch. 16 - Describe the process followed when estimating...Ch. 16 - How does the balance in Allowance for Doubtful...Ch. 16 - Under the allowance method, what impact does the...Ch. 16 - Under the allowance method, what journal entries...Ch. 16 - Describe the accounting procedures when using the...Ch. 16 - What are three disadvantages of using the direct...Ch. 16 - CALCULATION OF NET REALIZABLE VALUE L. R. Updike...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES Rossins...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF RECEIVABLES...Ch. 16 - COLLECTION OF ACCOUNTS WRITTEN OFFALLOWANCE METHOD...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND...Ch. 16 - DIRECT WRITE-OFF METHOD Maria Rivera, owner of...Ch. 16 - COLLECTION OF ACCOUNT WRITTEN OFFDIRECT WRITE-OFF...Ch. 16 - UNCOLLECTIBLE ACCOUNTSALLOWANCE METHOD Pyle...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND...Ch. 16 - AGING ACCOUNTS RECEIVABLE An analysis of the...Ch. 16 - DIRECT WRITE-OFF METHOD Williams Hendricks...Ch. 16 - CALCULATION OF NET REALIZABLE VALUE Mary Martin...Ch. 16 - UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF SALES Nicoles...Ch. 16 - UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF RECEIVABLES...Ch. 16 - COLLECTION OF ACCOUNT WRITTEN OFFALLOWANCE METHOD...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND...Ch. 16 - DIRECT WRITE-OFF METHOD Brent Mussellman, owner of...Ch. 16 - COLLECTION OF ACCOUNT WRITTEN OFFDIRECT WRITE-OFF...Ch. 16 - UNCOLLECTIBLE ACCOUNTSALLOWANCE METHOD Lewis...Ch. 16 - UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND...Ch. 16 - AGING ACCOUNTS RECEIVABLE An analysis of the...Ch. 16 - DIRECT WRITE-OFF METHOD Lee and Chen Distributors...Ch. 16 - Sam and Robert are identical twins. They opened...Ch. 16 - Martel Co. has 320,000 in Accounts Receivable on...Ch. 16 - At the end of 20-2, Martel Co. had 380,000 in...Ch. 16 - At the end of 20-3, Martel Co. had 410,000 in...

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