FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Santana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $44,000 during the first three months of 2020 and that the Accounts Receivable balance on March 31, 2020, is $22,867. Required 1. Prepare the adjusting entry to record bad debts expense on March 31, 2020, under each separate assumption. There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31. a. Bad debts are estimated to be 1% of total revenues. b. Bad debts are estimated to be 2% of accounts receivable. (Round to the dollar.) 2. Assume that Business Solutions’s Accounts Receivable balance at June 30, 2020, is $20,250 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31, 2020. If Rey uses the method in part 1b, what adjusting journal entry is made to recognize bad debts expense on June 30, 2020? 3. Should Rey consider adopting the direct…
Spring Garden Flowers had the following balances at December 31, 2024, before the year-end adjustments:
E (Click the icon to view the balances.)
The aging of accounts receivable yields the following data:
E (Click the icon to view the accounts receivable aging schedule.)
Requirements
Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method.
1.
2.
Prepare a T-account to compute the ending balance of Allowance for Bad Debts.
Requirement 1. Journalize Spring's entry to record bad debts expense for 2024 using the aging-of-receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts
Debit
Credit
Dec.
31
Data Table
Accounts Receivable
Allowance for Bad Debts
66,000
1,615
Requirement 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts.
Allowance for Bad Debts
Print
Done
Data Table
Age of Accounts Receivable
0-60 Days
Over 60 Days
Total…
Hardy's Landscape Service's total revenue on account for 2018 amounted to $273,205. The company, which uses the allowances method, estimates bad debts at 1/2 percent of total revenue on account.
Required:
Journalize the following selected entries:
2012
Dec. 12 Record services performed on account for E.E. Morton, $245.
Dec. 31 Record the adjusting entry for Bad Debts Expense.
Dec. 31 Record the closing entry for Bad Debts Expense.
2013
Feb. 18 Write off the account of E.E. Morton as uncollectible, $245.
Chapter 7 Solutions
FINANCIAL ACCT-CONNECT
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 1QSCh. 7 - Solstice Company determines on October 1 that it...Ch. 7 - Solstice Company determines on October 1 that it...Ch. 7 - The following list describes aspects of either the...Ch. 7 - Gomez Corp. uses the allowance method to account...Ch. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QSCh. 7 - Prob. 11QSCh. 7 - Prob. 12QSCh. 7 - Prob. 13QSCh. 7 - Accounts receivable subsidiary ledger; schedule of...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Percent of accounts receivable method P2 At each...Ch. 7 - Aging of receivables method P2 Daley Company...Ch. 7 - Percent of receivables method P2 Refer to the...Ch. 7 - Writing off receivables P2 Refer to the...Ch. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Notes receivable transactions P3 Refer to the...Ch. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Sales on account and credit card sales C1 Mayfair...Ch. 7 - Estimating and reporting bad debts P2 At December...Ch. 7 - Aging accounts receivable and accounting for bad...Ch. 7 - Prob. 4PSACh. 7 - Prob. 5PSACh. 7 - Prob. 1PSBCh. 7 - Prob. 2PSBCh. 7 - Prob. 3PSBCh. 7 - Prob. 4PSBCh. 7 - Prob. 5PSBCh. 7 - Santana Rey, owner of Business Solutions, realizes...Ch. 7 - Comparative figures for Apple and Google follow....Ch. 7 - Anton Blair is the manager of a medium-size...Ch. 7 - As the accountant for Pure-Air Distributing, you...Ch. 7 - Access eBays February 6, 2015, filing of its 10-K...Ch. 7 - Prob. 7BTNCh. 7 - Prob. 9BTN
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- At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.arrow_forwardSantana Rey, owner of Business Solutions, realizes that she needs to begin accounting for bad debts expense. Assume that Business Solutions has total revenues of $63,000 during the first three months of 2020, and that the Accounts Receivable balance on March 31, 2020, is $22,217.Required:1a. Prepare the adjusting entry to record bad debts expense, which are estimated to be 1% of total revenues on March 31, 2020. There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31. 1b. Prepare the adjusting entry to record bad debts expense, which are estimated to be 2% of accounts receivable on March 31, 2020. There is a zero unadjusted balance in the Allowance for Doubtful Accounts at March 31.2. Assume that Business Solutions's Accounts Receivable balance at June 30, 2020, is $21,000 and that one account of $100 has been written off against the Allowance for Doubtful Accounts since March 31, 2020. If Rey uses the method in part 1b, what adjusting journal entry is…arrow_forwardAt December 31, 2017, the trial balance of Windsor, Inc. contained the following amounts before adjustment. Debit Credit Accounts Receivable $178,900 Allowance for Doubtful Accounts $ 1,610 Sales Revenue 915,400 (a) Prepare the adjusting entry at December 31, 2017, to record bad debt expense, assuming that the aging schedule indicates that $10,260 of accounts receivable will be uncollectible. (b) Repeat part (a), assuming that instead of a credit balance there is a $1,610 debit balance in Allowance for Doubtful Accounts. (c) During the next month, January 2018, a $1,940 account receivable is written off as uncollectible. Prepare the journal entry to record the write-off. (d) Repeat part (c), assuming that Windsor, Inc. uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable. (Credit account titles are automatically indented when amount is entered. Do not indent…arrow_forward
- At December 31, 2018, the Accounts Receivable balance of Solar Energy Manufacturing is $205,000. The Allowance for Bad Debts account has a $8,050 debit balance. Solar Energy Manufacturing prepares the following aging schedule for its accounts receivable: 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, 2018. Begin by determining the target balance of Allowance for Bad Debts by using the age of each account. Age of Accounts 1-30 31-60 61-90 Over 90 Total Days Days Days Days Balance Accounts Receivable $70,000 $85,000 $45,000 $5,000 Estimated percent uncollectible 0.5 % 5.0 % 7.0 % 46.0 % Estimated total uncollectible Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and…arrow_forward1. Prepare the entry to record the write-off ofuncollectible accounts during 2019. 2. Prepare the entries to record the recovery ofthe uncollectible account during 2019 3. Prepare the entry to record bad debt expense(BDE) at the end of 2019. Ending balance ofAFDA was Rp18,200 (Cr.) 4. Determine the ending balance of AccountsReceivable as of December 31, 2019. 5. What is the net realizable value of thereceivables at the end of 2019? 6. The company has a notes receivable ofRp24,000 at January 15, 2019 for 3 months at10% interest rate. Prepare journal entry as ofApril 15, 2019, on its due date.arrow_forwardSunshine and Rainbows Resort had the following balances at December 31, 2025, before the year-end adjustments: View the balances. The aging of accounts receivable yields the following data: View the accounts receivable aging schedule. Requirements 1. Journalize Sunshine and Rainbows Resort's entry to record bad debts expense for 2025 using the aging-of-receivables method. 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Requirement 1. Journalize Sunshine and Rainbows Resort's entry to record bad debts expense for 2025 using the aging-of-receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Dec. Date 31 Accounts and Explanation Debit Credit Balances - ☑ Accounts Receivable Aging Schedule Age of Accounts Receivable 0-60 Days Over 60 Days Total Receivables Accounts Receivable 75,000 $ 3,000 $ 78,000 Estimated percent uncollectible × 4% * 24% - ☑ Accounts Receivable Allowance for Bad…arrow_forward
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- On December 31, 2017, when its accounts receivable were $276,000 and its account Allowance for Doubtful Accounts had an unadjusted debit balance of $1,800, Marx Corp. estimated that $15,500 of its accounts receivable would become uncollectible, and it recorded the bad debts adjusting entry. On May 11, 2018, Marx determined that Fei Ya Cheng's account was uncollectible and wrote off $1,700. On November 12, 2018, Cheng paid the amount previously written off. (a) Prepare the required journal entries to record each of the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) 2017 Date Account Titles and Explanation Debit Creditarrow_forwardCastle 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_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_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