1
Concept Introduction:
The computation of estimated bad debts, bad debt expense, and bad debts written off in each given case.
2.
Concept Introduction: Accounts receivable are the cash receivable on account of credit sales, accounts receivables are recognized as current assets in the year-end balance sheet, after deducting the estimated uncollectible from receivables. At the end of the year, bad debts are written off and deducted from the estimated uncollectible account.
The computation of accounts receivable shown in the balance sheet and the amount of bad debt expense included in the 2015 income statement assuming the direct write-off method is used.
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- Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.arrow_forwardAngelos Outlet used to report bad debt using the balance sheet method and is now switching to the income statement method. The percentage uncollectible will remain constant at 5%. Credit sales figures for 2019 were $866,000, and accounts receivable was $732,000. How much will Angelos Outlet report for 2019 bad debt estimation under the income statement method?arrow_forwardI NEED HELP FEELING IN THE BLANKS Information related to Novak Company for 2020 is summarized below. Total credit sales $2,575,000 Accounts receivable at December 31 853,000 Bad debts written off 34,900 (a)What amount of bad debt expense will Novak Company report if it uses the direct write-off method of accounting for bad debts? $________________ (b)Assume that Novak Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Novak record if it has an Allowance for Doubtful Accounts credit balance of $3,700? $___________________ (c)Assume that Novak Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Novak record if it has an Allowance for Doubtful Accounts debit balance of $3,700? $__________________arrow_forward
- Castle Company provides estimates for its uncollectible accounts. The allowance for uncollectible accounts had acredit balance of $17,280 at the beginning of 2018 and a $22,410 credit balance at the end of 2018 (after adjusting entries). If the direct write-off method had been used to account for uncollectible accounts (bad debt expenseequals actual write-offs), the income statement for 2018 would have included bad debt expense of $17,100 andrevenue of $2,200 from the collection of previously written off bad debts.Required:Determine bad debt expense for 2018 according to the allowance method.arrow_forwardDuring 2014, a company wrote off $6,000 in uncollectible accounts receivable. At the end of the year, they estimated bad debt expense using a percent of gross sales. In 2015, the company recovered a $1,000 account that was written off in 2014. The recording of this recovery would include a a. Debit to retained earnings b. Credit to accounts receivable c. Debit to allowance for doubtful accounts d. Credit to prior period adjustmentsarrow_forwardAt the close of its first year of operations, December 31, 2017, Ming Company had accounts receivable of $1,620,000, after deducting the related allowance for doubtful accounts. During 2017, the company had charges to bad debt expense of $270,000 and wrote off, as uncollectible, accounts receivable of $120,000. What should the company report on its balance sheet at December 31, 2017, as accounts receivable before the allowance for doubtful accounts?arrow_forward
- Circle Inc. had bad debt expense on its customer receivables as follows for 2016-2019, respectfully. Compute the trend percentages (whole number % changes, only) for these years assuming 2016 is the base year. 2016 $80,000 2017 $88,000 2018 $95,000 2019 $102,000arrow_forwardRequired: 1. Calculate the amount of allowance for credit losses at March 31, 2017. 2. Prepare the general journal entry to record the bad debt expense for the year. 3. Post the journal entry to the Allowance for Credit Loss account.arrow_forwardThe company had the following beginning year balances in 2016. The company had credit sales of $1,000,000 and cash sales of $1,200,000. The company estimates bad debts at 1%. During the year $12,000 of the bad debt was deemed uncollectable. On 12/31/16 the remaining accounts receivable outstanding balance for the company was $295,000. 2016 Beginning Balances: Accounts Receivable: $162,000 Allowance for Doubtful Accounts: $9,000 (credit) Accounts Receivable, net: $153,000 Answer the following questions for the T-account for Accounts Receivable: • Sum up all of the items on the debit side (including any beginning debit balances), what is that total? • Sum up all of the items on the credit side (including any beginning credit balances), what is that total? Answer the following questions for the T-account for Allowance for Bad Debt: • Sum up all of the items on the debit side (including any beginning debit balances), what is that total? • Sum up all of the items on the credit side…arrow_forward
- 3. The following data are presented concerning the Allowance for Bad Debts of Company A for the year ended December 31, 2023: Allowance for Bad Debts, Jan.1,2023 Write off of Accounts Receivable during 2023 P250,000 50,000 150,000 Recovery of Previously Written off Accounts Receivable Credit Sales for the year 1,200,000 Accounts Receivable, Jan. 1, 2023 Collections during 2023 Required: Determine the following for the year ended December 31,2023: 3.1. Bad Debts Expense assuming the company provides 2% Credit Sales 9,000,000 4,000,000 3.2. Ending Balance of Allowance for Bad debts using the assumption in number 3.1 3.3. Net Realizable Value of Accounts Receivable using the assumption in number 3.1 3.4. Bad Debts Expense assuming the company provides 10% of Ending Accounts Receivable 3.5. Ending Balance of Allowance for Bad debts using the assumption in number 3.4 3.6. Net Realizable Value of Accounts Receivable using the assumption in number 3.4arrow_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_forwardThe following information extracted from the accounting records of the South Co. at the beginning of 2020 : Accounts Receivable $ 63000 , Allowance for Doubtful Accounts 1400 ( credit ) during 2017 : 1- sales on credit amounted to $ 575000 2- $ 557400 was collected on receivables 3- $ 2600 of receivables were written off as uncollectible . On December 31 , 2017 , South Co estimates its bad debts to be 4 % of the gross accounts receivable balance From the previous information put true or falsearrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College