UNCOLLECTIBLE ACCOUNTS—PERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Anderson’s Greeting Cards was $180,000. Credit sales for the year were $1,950,000. REQUIRED Make the necessary adjusting entry in general journal form under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value. 1. Allowance for Doubtful Accounts has a credit balance of $2,600. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $30,250 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of $1,900. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.0% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $20,500 in uncollectible accounts.

BuyFind

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160
BuyFind

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160

Solutions

Chapter
Section
Chapter 16, Problem 9SPB
Textbook Problem

UNCOLLECTIBLE ACCOUNTS—PERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Anderson’s Greeting Cards was $180,000. Credit sales for the year were $1,950,000.

REQUIRED

Make the necessary adjusting entry in general journal form under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value.

  1. 1. Allowance for Doubtful Accounts has a credit balance of $2,600.
    1. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales.
    2. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $30,250 in uncollectible accounts.
  2. 2. Allowance for Doubtful Accounts has a debit balance of $1,900.
    1. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.0% of credit sales.
    2. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of $20,500 in uncollectible accounts.

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Chapter 16 Solutions

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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