FINANCIAL ACCOUNTING W/ACCESS >CI<
2nd Edition
ISBN: 9781259999024
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 5, Problem 5.4BP
Record transactions related to uncollectible accounts (LO5–4, 5–5)
Facial Cosmetics provides plastic surgery primarily to hide the appearance of unwanted scars and other blemishes. During 2018, the company provides services of $410,000 on account. Of this amount, $60,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2018, is presided below.
| Age Group | Amount Receivable | Estimated Percent Uncollectible |
| Not yet due | $40,000 | 3% |
| 0–30 days past due | 11,000 | 4% |
| 31–60 days past due | 8,000 | 11% |
| More than 60 days past due | 1,000 | 25% |
| Total | $60,000 |
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 $400 (debit).
3. On April 3, 2019, a customer’s account balance of $500 is written off as uncollectible. Record the write-off.
4. On July 17, 2019, the customer whose account was written off in Requirement 3 unexpectedly pays $100 of the amount but does not expect to pay any additional amounts. Record the cash collection.
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E8-4 Recording Write-Offs and Recoveries [LO 8-2]
Prior to recording the following, Elite Electronics, Inc., had a credit balance of $2,300 in its Allowance for Doubtful Accounts.
Required:
Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
On August 31, a customer balance for $330 from a prior year was determined to be uncollectible and was written off.
On December 15, the customer balance for $330 written off on August 31 was collected in full.
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
At
December
31,
2024,
the Accounts Receivable balance of
Advanced Automotive Technology
is
$155,000.
The Allowance for Bad Debts account has a
$7,080
debit balance.
Advanced Automotive Technology
prepares the following aging schedule for its accounts receivable:
Data table
Age of Accounts
1-30 Days
31-60 Days
61-90 Days
Over 90 Days
Accounts Receivable
$60,000
$40,000
$50,000
$5,000
Estimated percent uncollectible
0.8%
4.0%
7.0%
52.0%
Requirements
1.
Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at
December
31,
2024.
2.
Show how
Advanced Automotive Technology
will report its net accounts receivable on its
December
31,
2024,
balance sheet.
equirement 1. Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at…
Chapter 5 Solutions
FINANCIAL ACCOUNTING W/ACCESS >CI<
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