GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 6, Problem 6.2P
Recording
Peet’s Coffee & Tea, Inc., is a specialty coffee roaster and marketer of branded fresh-roasted whole bean coffee. It recently disclosed the following information concerning the Allowance for Doubtful Accounts on its Form 10-K Annual Report submitted to the Securities and Exchange Commission
A summary of the Allowance for Doubtful Accounts is as follows (dollars in thousands)
| Allowance for Doubtful Accounts | Balance at Beginning of Period | Additions (Charges) to Expense | Write-Offs | Balance at End of Period |
| Year 1 | $128 | $ ? | $ 0 | $132 |
| Year 2 | 132 | 187 | ? | 283 |
| Year 3 | 283 | 42 | 201 | 124 |
Required:
- 1. Record summary
journal entries related to bad debts for Year 3. - 2. Supply the missing dollar amounts noted by (?) for Year 1 and Year 2
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Students have asked these similar questions
a) The trial balance before adjustment of Jason Donohoe Company reports the following balances:
Accounts receivable
Allowance for doubtful accounts
Sales (all on credit)
Sales returns and allowances
Dr.
$300,000
80,000
Date
Instructions
(a) Prepare the entry for estimated bad debts assuming the balance sheet approach is used, and
doubtful accounts are estimated to be 6% of gross accounts receivable.
DR/CR
Cr.
(b) Prepare the entry for estimated bad debts assuming that income statement approach is used
at 1% of net sales.
$ 5,000
1,700,000
(c) Assume that all the information above is the same, except that the Allowance for Doubtful
Accounts has a debit balance of $5,000 instead of a credit balance. How will this difference
affect the journal entry in part (a)?
Account
Debit
Credit
Present the journal entry necessary to record each of the following items; assuming King Company uses the
Allowance method of accounting for Uncollectible Accounts (Bad Debts).
1. Uncollectible Accounts Expense for the year is estimated to be 6% of Net Sales. Net Sales for the year are
$100,000 and the Allowance account has a $600 credit balance
2. A $20,000 note is received from a customer on account.
3. The $800 balance in an individual customer's account is written off as uncollectible.
4. The company received $200 from a customer whose account had been previously written
off as uncollectible.
5
Allowance for Doubtful Accounts has a debit balance of $988 at the end of the year (before adjustment), and an analysis of accounts in the customers ledger indicates uncollectible receivables of $15,286. Which of the following entries records the proper adjusting entry for bad debt expense?
Select the correct answer.
a-debit Allowance for Doubtful Accounts, $15,286 credit Bad Debt Expense, $15,286
b-debit Bad Debt Expense, $16,274 credit Allowance for Doubtful Accounts, $16,274
c-debit Bad Debt Expense, $14,298 credit Allowance for Doubtful Accounts, $14,298
d-debit Bad Debt Expense, $988 credit Allowance for Doubtful Accounts, $988
Chapter 6 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 6 - Prob. 1QCh. 6 - What is gross profit or gross margin on sales? In...Ch. 6 - What is a credit card discount? How does it affect...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Differentiate accounts receivable from notes...Ch. 6 - Which basic accounting principle is the allowance...Ch. 6 - Using the allowance method, is bad debt expense...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Briefly explain how the total amount of cash...Ch. 6 - Prob. 16QCh. 6 - Sales discounts with terms 2/10, n/30 mean: a. 10...Ch. 6 - Gross sales total 300,000, one-half of which were...Ch. 6 - A company has been successful in reducing the...Ch. 6 - When a company using the allowance method writes...Ch. 6 - You have determined that Company X estimates bad...Ch. 6 - Prob. 6MCQCh. 6 - Which of the following is not a step toward...Ch. 6 - When using the allowance method, as bad debt...Ch. 6 - Which of the following best describes the proper...Ch. 6 - Prob. 10MCQCh. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Recording Bad Debts Prepare journal entries for...Ch. 6 - Prob. 6.4MECh. 6 - Determining the Effects of Credit Policy Changes...Ch. 6 - Prob. 6.6MECh. 6 - Prob. 6.7MECh. 6 - Prob. 6.1ECh. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.5ECh. 6 - Reporting Bad Debt Expense and Accounts Receivable...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Computing Bad Debt Expense Using Aging Analysis...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Interpreting tho Effects of Salos Declines and...Ch. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.1PCh. 6 - Recording Bad Debts and Interpreting Disclosure of...Ch. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Preparing an Income Statement and Computing the...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Reporting Net Sales and Expenses with Discounts,...Ch. 6 - Prob. 6.2APCh. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.1CONCh. 6 - Finding Financial Information Refer to the...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - Prob. 6.5CP
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