Financial Accounting - Access
4th Edition
ISBN: 9781259958533
Author: SPICELAND
Publisher: MCG
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Chapter 5, Problem 5.4AP
Record transactions related to uncollectible accounts (LO5–4, 5–5)
Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2018, Pearl provides services on account of $590,000. Of this amount, $80,000 remains receivable at the end of the war. An aging schedule as of December 31, 2018, is provided below.
| Age Group | Amount Receivable | Estimated Percent Uncollectible |
| Not yet due | $40,000 | 4% |
| 0–90 days past due | 16,000 | 20% |
| 91–180 days past due | 11,000 | 25% |
| More than 180 days past due | 13,000 | 80% |
| Total | $80,000 |
Required:
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2018, adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $5,000 (credit).
3. On July 19, 2019, a customer’s account balance of $8,000 is written off as uncollectible. Record the write-off.
4. On September 30, 2019, the customer whose account was written off in Requirement 3 unexpectedly pays the full amount. Record the cash collection.
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E9.8 (LO 2), AP On December 31, 2021, when its Allowance for Doubtful Accounts had a zero balance, Ling Co. estimated that 2% of its net accounts receivable of $450,000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Ling Co. determined that the Jeff Shoemaker account was uncollectible and wrote off $1,100. On June 12, 2022, Shoemaker paid the amount previously written off.
Instructions
A. Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022.
Journalize entries for the sale of accounts receivable.
5.
AA Company prepared an aging of its accounts receivable at December 31, 2022 and determined that the net realizable value of the receivables was P350,000. Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/22 – credit balance,P34,000
Accounts written off as uncollectible during 2022, P23,000
Accounts receivable at 12/31/22, P375,000
Uncollectible accounts recovered during 2022, P5,000
Total provisions made during 2022, P12,000
Statement 1: The amount of bad debts expense in 2022 is P9,000.
Statement 2: The ending balance of the allowance for uncollectible accounts is P25,000.
Group of answer choices
Only statement 1 is true
Both statements are true
Only statement 2 is true
Both statements are false
Mercy Hospital has the following balances on December 31, 2024, before any adjustment: Accounts Receivable = $70,000; Allowance for Uncollectible Accounts = $1,400 (credit). Mercy estimates uncollectible accounts based on an aging of accounts receivable as shown below.
Age Group
Amount Receivable
Estimated Percent Uncollectible
Not yet due
$50,000
15%
0 to 30 days past due
11,000
20%
31 to 90 days past due
8,000
45%
More than 90 days past due
1,000
85%
Total
$70,000
Required:1. Estimate the amount of uncollectible receivables.2. Record the adjusting entry for uncollectible accounts on December 31, 2024.3. Calculate net accounts receivable reported in the balance sheet.
Chapter 5 Solutions
Financial Accounting - Access
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