INTERMEDIATE ACCOUNTING (ACCT 3200B)
10th Edition
ISBN: 9781307660647
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 7, Problem 7.15BE
Uncollectible accounts; solving for unknown
• LO7–5, LO7–6
A company’s year-end balance in
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BE9-3 During its first year of operations, Gavin Company had credit sales of $3,000,000;
$600,000 remained uncollected at year-end. The credit manager estimates that $31,000 of
these receivables will become uncollectible.
(a) Prepare the journal entry to record the estimated uncollectibles.
(b) Prepare the current assets section of the balance sheet for Gavin Company. Assume
that in addition to the receivables it has cash of $90,000, inventory of $130,000, and
prepaid insurance of $7,500.
BE9-4 At the end of 2017, Carpenter Co. has accounts receivable of $700,000 and an
allowance for doubtful accounts of $54,000. On January 24, 2018, the company learns that
its receivable from Megan Gray is not collectible, and management authorizes a write-off
of $6,200.
(a) Prepare the journal entry to record the write-off.
(b) What is the cash realizable value of the accounts receivable (1) before the write-off and
(2) after the write-off?
BE9-7…
Question 4
Maple Co. provides for bad debts expense at the rate of 5.72% of ending Accounts Receivable. On
Jan 1, 20X1, the Allowance for Bad Debts was $18,000. There were $16,000 of accounts written off
during the year. Credit sales for the year were $640,000. Ending Accounts Receivable was
$115,000.
What is the amount of Bad Debt Expense for the year?
Enter your response as a whole number, no commas and no dollar signs.
Your Answer:
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w9-questions (13 of 23)
BE9-3 During its first year of operations, Gavin Company had credit sales of $3,000,000;
$600,000 remained uncollected at year-end. The credit manager estimates that $31,000 of
these receivables will become uncollectible.
(a) Prepare the journal entry to record the estimated uncollectibles.
(b) Prepare the current assets section of the balance sheet for Gavin Company. Assume
that in addition to the receivables it has cash of $90,000, inventory of $130,000, and
prepaid insurance of $7,500.
Chapter 7 Solutions
INTERMEDIATE ACCOUNTING (ACCT 3200B)
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 - Prob. 7.7QCh. 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 - Prob. 7.11QCh. 7 - Prob. 7.12QCh. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14QCh. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17QCh. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20QCh. 7 - Prob. 7.21QCh. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BECh. 7 - Prob. 7.2BECh. 7 - Prob. 7.3BECh. 7 - Prob. 7.8BECh. 7 - Prob. 7.9BECh. 7 - Prob. 7.10BECh. 7 - Prob. 7.11BECh. 7 - Prob. 7.12BECh. 7 - Prob. 7.13BECh. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BECh. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BECh. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BECh. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BECh. 7 - Prob. 7.25BECh. 7 - Prob. 7.26BECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.9ECh. 7 - Prob. 7.10ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.23ECh. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29ECh. 7 - Prob. 7.36ECh. 7 - Prob. 7.1PCh. 7 - Prob. 7.2PCh. 7 - Prob. 7.3PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.1DMPCh. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMPCh. 7 - Prob. 7.6DMPCh. 7 - Prob. 7.9DMP
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- View Policies Current Attempt in Progress Vaughn Manufacturing has outstanding accounts receivable totaling $ 6.47 million as of December 31 and sales on credit during the year of $ 24.5 million. There is also a credit balance of $ 11500 in the allowance for doubtful accounts. If the company estimates that 6% of its outstanding receivables will be uncollectible, what will be the amount of bad debt expense recognized for the year? O $388200. O $ 399700. O $ 376700. O $1470000. Save for Later Attempts: 0 of 1 used Submit Answerarrow_forward12.10 Doubtful debts – ageing method * LO3 On 1 June, McLean, Roberts and Associates had Accounts Receivable and Allowance for Doubtful Debts accounts as set out below. Ignore GST. Accounts Receivable 1/6 Balance 847 000 Allowance for Doubtful Debts 1/6 Balance 12 250 During June, the following transactions occurred: 1. fees earned on credit, $1 200 000 2. fees refunded, $25 000 3. accounts receivable collected, $1450 000 4. accounts written off as uncollectable, $14 740. Based on an ageing of accounts receivable on 30 June, the firm decided that the Allowance for Doubtful Debts account should have a credit balance of $13 000 on the balance sheet as at 30 June. Required (a) Prepare general journal entries to record the four transactions above and to adjust the Allowance for Doubtful Debts account. (b) Show how accounts receivable and the allowance for doubtful debts would appear on the balance sheet at 30 June. (c) On 29 July, Blundell Ltd, whose $1870 account had been written off as…arrow_forwardProblem 7-8 (Algo) Factoring of accounts receivable; without recourse [LO7-8] Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2021, the company transferred $890,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits 90% of the factored amount and retains 10%. When Milpitas collects the receivables, it remits to Samson the retained amount less a 4% fee (4% of the total factored amount). Samson estimates the fair value of the last 10% of its receivables to be $69,000. Required: Prepare the journal entry for Samson Wholesale Beverage for the transfer of accounts receivable on April 30, assuming the sale criteria are met. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) O Answer is not complete. No Event General Journal Debit Credit 1 Cash 801,000 Loss on sale of receivables 59,720 X Receivable from factor…arrow_forward
- Question 15 A company has provided the following information for Allowance for Doubtful Accounts: Allowance for Doubtful Accounts Beginning Balance = $2,700 Wrote-off $2,100 of uncollectible accounts Allowance for Doubtful Accounts Ending Balance = 3,200 How much did the company record as Bad Debt Expense? $3,800 None of these are correct. $2,600 $500 O $1,600arrow_forwardExercise 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?…arrow_forwardPAGE 467 PE9-4B At the end of the current year, Accounts Receivable has a balance of $3,460,000. Allowance for Doubtful Accounts has a debit balance of $12,500 and sales for the year total $46,300,000 Using the aging method the balance of Allowance for Doubtful Accounts is estimated as S245,000 Determine the net realizable value of Accounts Receivable 3,215,000 3,460,000 245,000 O 12,500arrow_forward
- PROBLEM 5 NINE, INC. estimates its bad debt losses by aging its accounts receivable. The aging schedule of accounts receivable at Age of Accounts 0- 30 days 31 - 60 days 61 - 90 days 91 - 120 days Over 120 days December 31. below. Amount 2016. is presented P 843,200 461.000 192.400 76,650 39.400 Nine Inc.'s uncollectible accounts experience for the past 5 years are summarized in the 0 - 30 Days 0.3% following schedule: 61 - 90 Days 12% 91 - 120 Days 38% A/R Balance Dec. 31 P 1,312,500 999,999 465,000 816.000 1,243,667 31 - 60 Over 120 Year 2015 Days 1.8% Days 65% 1.6% 1.5% 2014 0.5% 11% 41% 70% 2013 69% 0.2% 0.4% 0.9% 9% 50% 47% 33% 2012 1.7% 10.2% 81% 2011 2.0% 9.7% 95% The balance of the allowance for bad debts account at December 31, 2016. (before adjustment) is P84,500. Requirements: 1. What is the average bad debt expense rate for "91-120 days" accounts? A. 76% В. 8.6% C. 10.38% D. 41.80%arrow_forwardQuestion 8 At January 1, 2025, XYZ Company had an allowance for doubtful accounts with a $39,300 credit balance. XYZ Company reported the following information for 2025: 4 Sales revenue Cash collections from customers Write-offs of uncollectible accounts Recoveries of previously written-off accounts Bad debt expense In order to estimate the bad debt expense, XYZ Company prepared the following aging schedule at December 31, 2025: not past due 1-30 days past due 31-60 days past due 61-90 days past due over 90 days past due total accounts receivable $392,800 $307,500 ? Accounts Receivable % Uncollectible 3% 7% 11% 24% 46% $181,000 $ 36,000 $ 42,000 $ 14,600 $ 31,090 $ 21,000 $ 13,000 $293,000 Calculate XYZ Company's accounts receivable balance at January 1, 2025.arrow_forwardQUESTION 28 An aging of a company's accounts receivable indicates that $5,000 is estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 credit balance, the adjustment to record bad debts for the period will require a debit to Allowance for Doubtful Accounts for $4, 100. credit to Allowance for Doubtful Accounts for $5,000. debit to Bad Debt Expense for $4,100. debit to Bad Debt Expense for $5,000. QUESTION 29arrow_forward
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Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License