GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.12E
Uncollectible accounts; allowance method and direct write-off method compared; solving for unknown
• LO7–6
Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had a credit balance of $17,280 at the beginning of 2018 and a $22,410 credit balance at the end of 2018 (after
Required:
Determine bad debt expense for 2018 according to the allowance method.
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Exercise 7-16 (Static) Uncollectible accounts; allowance method; balance sheet approach; financial
statement effects [LO7-5, 7-6]
Colorado Rocky Cookie Company offers credit terms to its customers. At the end of 2024, accounts receivable totaled $625,000. The
allowance method is used to account for uncollectible accounts. The allowance for uncollectible accounts had a credit balance of
$32,000 at the beginning of 2024 and $21,000 in receivables were written off during the year as uncollectible. Also, $1,200 in cash
was received in December from a customer whose account previously had been written off. The company estimates bad debts by
applying a percentage of 10% to accounts receivable at the end of the year.
Required:
1. Prepare journal entries to record the write-off of receivables, the collection of $1,200 for previously written off receivables, and
the year-end adjusting entry for bad debt expense.
2. How would accounts receivable be shown in the 2024 year-end balance sheet?…
es
Exercise 7-12 (Algo) Uncollectible accounts; allowance method vs. direct write-off method [LO7-5, 7-6]
Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross
accounts receivable. The allowance for uncollectible accounts had a credit balance of $22,000 at the
beginning of 2024. No previously written-off accounts receivable were reinstated during 2024. At
12/31/2024, gross accounts receivable totaled $366,700, and prior to recording the adjusting entry to
recognize bad debts expense for 2024, the allowance for uncollectible accounts had a debit balance of
40,300.
Required:
1. What was the balance in gross accounts receivable as of 12/31/2023?
2. What journal entry should Johnson record to recognize bad debt expense for 2024?
3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2024.
Determine the amount of accounts receivable written off during 2024.
4. If Johnson instead used the direct…
2. An analysis and aging of Concord Corp. accounts receivable at December 31, 2025, disclosed the following.
Amounts estimated to be uncollectible
Accounts receivable
Allowance for doubtful accounts (per books)
PAR
MEMBER
Net realizable value $
$180,710
What is the net amount expected to be collected of Concord's receivables at December 31, 2025?
Credit sales during 2025
Bad debt expense
Allowance for doubtful accounts 1/1/25
1,799,500
O Search
125,900
3. Marigold Co. provides for doubtful accounts based on 3% of gross accounts receivable. The following data are av
a
FF
$3,343,800
57,040
16,760
Chapter 7 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - Prob. 7.3QCh. 7 - Prob. 7.4QCh. 7 - Prob. 7.5QCh. 7 - Prob. 7.6QCh. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...Ch. 7 - Briefly explain the difference between the income...
Ch. 7 - Prob. 7.11QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.14QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Explain how the CECL model (introduced in ASU No....Ch. 7 - Prob. 7.18QCh. 7 - Prob. 7.19QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.21QCh. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Cash discounts; gross method LO73 On December 28,...Ch. 7 - Prob. 7.5BECh. 7 - Sales re turns LO74 During 2018, its first year...Ch. 7 - Sales re turns LO74 Refer to the situation...Ch. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.12BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.15BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.17BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.20BECh. 7 - Prob. 7.21BECh. 7 - Impairments of Accounts Receivable Appendix 7B...Ch. 7 - Credit Losses on Accounts Receivable (CECL Model) ...Ch. 7 - Prob. 7.1ECh. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Trade and cash discounts; the gross method and the...Ch. 7 - Prob. 7.6ECh. 7 - Cash discounts; the net method LO73 [This is a...Ch. 7 - Sales returns LO74 Halifax Manufacturing allows...Ch. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Uncollectible accounts; allowance method; balance...Ch. 7 - Uncollectible accounts; allowance method and...Ch. 7 - Uncollectible accounts; allowance method; solving...Ch. 7 - Note receivable LO77 On June 30, 2018, the...Ch. 7 - Noninterest-bearing note receivable LO77 [This is...Ch. 7 - Long-term notes receivable LO77 On January 1,...Ch. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Discounting a note receivable LO78 Selkirk...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Receivables; transaction analysis LO73, LO75...Ch. 7 - Prob. 7.25ECh. 7 - Prob. 7.26ECh. 7 - Prob. 7.27ECh. 7 - Prob. 7.28ECh. 7 - Prob. 7.29ECh. 7 - Prob. 7.30ECh. 7 - Impairments of Notes Receivable Appendix 7B At...Ch. 7 - Prob. 7.32ECh. 7 - Prob. 7.33ECh. 7 - Prob. 7.34ECh. 7 - Uncollectible accounts; allowance method; income...Ch. 7 - Uncollectible accounts; Amdahl LO75 Real World...Ch. 7 - Bad debts; Nike, Inc. LO75 Real World Financials...Ch. 7 - Uncollectible accounts LO75, LO76 Raintree...Ch. 7 - Prob. 7.5PCh. 7 - Notes receivable; solving for unknowns LO77...Ch. 7 - Prob. 7.7PCh. 7 - Prob. 7.8PCh. 7 - Prob. 7.9PCh. 7 - Prob. 7.10PCh. 7 - Prob. 7.11PCh. 7 - Accounts and notes receivable; discounting a note...Ch. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15PCh. 7 - Prob. 7.16PCh. 7 - Prob. 7.17PCh. 7 - Prob. 7.1BYPCh. 7 - Prob. 7.2BYPCh. 7 - Prob. 7.3BYPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.6BYPCh. 7 - Prob. 7.7BYPCh. 7 - Prob. 7.8BYPCh. 7 - Prob. 7.9BYPCh. 7 - Prob. 7.10BYPCh. 7 - Prob. 7.11BYPCh. 7 - Prob. 1CCTC
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- Tines Commerce computes bad debt based on the allowance method. They determine their current years balance estimation to be a credit of $45,000. The previous period had a credit balance in Allowance for Doubtful Accounts of $12,000. What should be the reported figure in the adjusting entry for the current period? A. $12,000 B. $45,000 C. $33,000 D. $57,000arrow_forwardUsing the percentage of receivables method for recording bad debt expense, estimated uncollectible accounts are $11,000. If the balance of the Allowance for Doubtful Accounts is $2,800 debit before adjustment, what is the balance after adjustment? Select one: a. $11,000 b. $8,200 c. $13,800 d. $2,800 e. The answer does not existarrow_forward4. At the end of its first year of operations, December 31, 2025, Swifty Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts Customer accounts written off as uncollectible during 2025 Bad debt expense for 2025 What should be the balance in accounts receivable at December 31, 2025, before subtracting the allowance for doubtful accounts? Net credit sales Accounts receivable, before deducting allowance for doubtful accounts Allowance for doubtful accounts Accounts receivable 5. The following accounts were taken from Nash Inc.'s trial balance at December 31, 2025. Debit $13,960 333,200 $872,800 O Search 26,370 Credit 89,470 $804,200 $ LOCO DELL garrow_forward
- Question 7 of 18 Which of the following methods of determining bad debt expense best achieves the matching concept? Select the correct response: Aging of accounts receivable Percentage of ending accounts receivable Direct write-off Percentage of net credit sales < Previousarrow_forward1 Calculate, record, post, and analyze the adjustment to recognize bad debt expense under the following information provided: Account DR CR Accounts receivable Allowance for doubtful accounts 365,000 15,000 Net credit sales 827,000 Amount % Estimated Total Estimated Number of Days Outstanding Receivable Uncollectible Uncollectible 0-30 175,000 1.00% 31-60 80,000 2.00% 61-90 50,000 42,000 18,000 5.00% Page 1 91-120 20.00% Over 120 40.00% TOTALS 365,000 Page 2 General Ledger Accounts Receivable A Allowance for Doubtful XA Bad Debt Expense E Debit Credit Debit Credit Debit Credit Transaction Analysis ASSETS LIABILITIES EQUITY REVENUES EXPENSES NET INCOME + General Journal DR CR 2 What is the net realizable value of Accounts receivable?arrow_forward43. The uncollectible accounts expense for the year ended December 31, 2022 is? After reviewing the aging schedule of its accounts receivable at December 31, 2022, Pacers Company found out that the net realizable value of the receivables at that date was P150,250. Additional information as follows: Accounts receivable at December 31, 2022 Allowance for uncollectible accounts, January 1, 2022 Accounts written off, October 20, 2022 P192,500 28,000 21,000arrow_forward
- Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are RM250,000. If the balance of the Allowance for Doubtful Accounts is RM60,000 debit before adjustment, what is the amount of bad debts expense for that period? O A. RM250,000 B. RM60,000 O C. RM310,000 D. RM190,000arrow_forward2. An analysis and aging of Concord Corp. accounts receivable at December 31, 2025, disclosed the following. Amounts estimated to be uncollectible Accounts receivable Allowance for doubtful accounts (per books) $180,710 1,799,500 Net realizable value What is the net amount expected to be collected of Concord's receivables at December 31, 2025? 125,900 1673600arrow_forwardReceivables Method [LO 8-2] Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $19,700. The account had an unadjusted credit balance of $12,000 at that time. Required: Prepare journal entries for each of the following. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $1,200 was determined to be uncollectible and was written off View transaction list Journal entry worksheet 1 2 Record the end-of-period adjustment for bad debts under the aging of accounts receivable method.arrow_forward
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