Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 8, Problem 2PB
1.
To determine
Create T-account for allowance for doubtful accounts and enter its transactions of 2015.
2.
To determine
Prepare
3.
To determine
Identify the missing dollar amount of write off in 2014 and 2013, by preparing a T-account for allowance for doubtful accounts.
4.
To determine
Calculate the amount by which the net receivables and net income would have decreased in 2013, if Corporation X had written off an additional $20 (million) of receivable.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
SAP is a global company headquartered in Germany. SAP is a market leader in enterprise application software and also a leading experience management, analytics, and business intelligence company. In a recent annual report, it disclosed the following information concerning its allowance for doubtful accounts (euros in millions denoted as €); Balance at Beginning of Period €99 Charged to Costs and Expenses €18 Amounts Written Off (€10) Balance at End of Period €107 Required: 1. Record summary journal entries related to the allowance for doubtful accounts for the current year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions.
Love Company requires advance payments with special orders for machinery constructed to customer specifications.These advances are nonrefundable. Information for the current year is:Advances from customers – January 1 P1,320,000Advances received with orders 2,160,000Advances applied to orders shipped 1,920,000Advances applicable to orders cancelled 120,000In Love Company’s December 31 statement of financial position, what amount should be reported as current liability foradvances from customers?a. P1,440,000 b. P1,560,000 c. P1,680,000 d. P0
Crane Company provides for doubtful accounts based on 4.5% of credit sales. The following data are available for 2020:
Credit sales during 2020
$3,190,000
Allowance for doubtful accounts 1/1/20
35,500
Collection of accounts written off in prior years (customer credit was re-established)
15,300
Customer accounts written off as uncollectible during 2020
35,400
What is the balance in Allowance for Doubtful Accounts at December 31, 2020?
Allowance for doubtful accounts 12/31/20
$Enter your answer in accordance to the question statement
Save for Later
Attempts: 0 of 1 used
Submit Answer
Chapter 8 Solutions
Fundamentals Of Financial Accounting
Ch. 8 - What are the advantages and disadvantages of...Ch. 8 - Prob. 2QCh. 8 - Which basic accounting principles does the...Ch. 8 - Using the allowance method, is Bad Debt Expense...Ch. 8 - What is the effect of the write-off of...Ch. 8 - How does the use of calculated estimates differ...Ch. 8 - A local phone company had a customer who rang up...Ch. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - As of May 1, 2016, Krispy Kreme Doughnuts had...
Ch. 8 - Does an increase in the receivables turnover ratio...Ch. 8 - What two approaches can managers take to speed up...Ch. 8 - When customers experience economic difficulties,...Ch. 8 - (Supplement 8A) Describe how (and when) the direct...Ch. 8 - (Supplement 8A) Refer to question 7. What amounts...Ch. 8 - 1. When a company using the allowance method...Ch. 8 - 2. When using the allowance method, as Bad Debt...Ch. 8 - 3. For many years, Carefree Company has estimated...Ch. 8 - 4. Which of the following best describes the...Ch. 8 - 5. If the Allowance for Doubtful Accounts opened...Ch. 8 - 6. When an account receivable is recovered a....Ch. 8 - Prob. 7MCCh. 8 - 8. If the receivables turnover ratio decreased...Ch. 8 - Prob. 9MCCh. 8 - Prob. 10MCCh. 8 - Prob. 1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Reporting Accounts Receivable and Recording...Ch. 8 - Recording Recoveries Using the Allowance Method...Ch. 8 - Recording Write-Offs and Bad Debt Expense Using...Ch. 8 - Determining Financial Statement Effects of...Ch. 8 - Estimating Bad Debts Using the Percentage of...Ch. 8 - Estimating Bad Debts Using the Aging Method Assume...Ch. 8 - Recording Bad Debt Estimates Using the Two...Ch. 8 - Prob. 10MECh. 8 - Prob. 11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 15MECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Bad Debt Expense Estimates and...Ch. 8 - Determining Financial Statement Effects of Bad...Ch. 8 - Prob. 3ECh. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 5ECh. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Computing Bad Debt Expense Using Aging of Accounts...Ch. 8 - Recording and Reporting Allowance for Doubtful...Ch. 8 - Recording and Determining the Effects of Write-Off...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Using Financial Statement Disclosures to Infer...Ch. 8 - Using Financial Statement Disclosures to Infer Bad...Ch. 8 - Prob. 15ECh. 8 - Analyzing and Interpreting Receivables Turnover...Ch. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Interpreting Disclosure of Allowance for Doubtful...Ch. 8 - Recording Notes Receivable Transactions CS...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 2PBCh. 8 - Prob. 3PBCh. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Analyzing Allowance for Doubtful Accounts,...Ch. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 1SDCCh. 8 - Prob. 2SDCCh. 8 - Ethical Decision Making: A Real-Life Example You...Ch. 8 - Critical Thinking: Analyzing the Impact of Credit...Ch. 8 - Using an Aging Schedule to Estimate Bad Debts and...Ch. 8 - Accounting for Receivables and Uncollectible...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Aging of receivables; estimating allowance for doubtful accounts Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y7: The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair Nail, which is due in the next year. Wig Creations has a past history of uncollectible accounts by age category, as follows: Instructions 1. Determine the number of days past due for each of the preceding accounts. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of 7,375 before adjustment on December 31. Journalize the adjustment for uncollectible accounts. 5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?arrow_forwardIvanhoe Company provides for doubtful accounts based on 4.0% of credit sales. The following data are available for 2020: Credit sales during 2020 $3,020,000 Allowance for doubtful accounts 1/1/20 37,700 Collection of accounts written off in prior years (customer credit was re-established) 15,500 Customer accounts written off as uncollectible during 2020 36,100 What is the balance in Allowance for Doubtful Accounts at December 31, 2020? Allowance for doubtful accounts 12/31/20 $Enter your answer in accordance to the question statementarrow_forwardAdjusting and Correcting Entries Upon inspecting the books and records for Wernli Company for the year ended December 31, 2013, you find the following data: (a) A receivable of $640 from Hatch Realty is determined to be uncollectible. The company maintains an allowance for bad debts for such losses. (b) A creditor, E. F. Bowcutt Co., has just been awarded damages of $3,500 as a result of breach of contract by Wernli Company during the current year. Nothing appears on the books in connection with this matter. (c) A fire destroyed part of a branch office. Furniture and fixtures that cost $12,300 and had a book value of $8,200 at the time of the fire were completely destroyed. The insurance company has agreed to pay $7,000 under the provisions of the fire insurance policy. (d) Advances of $950 to salespersons have been previously recorded as sales salaries expense. (e) Machinery at the end of the year shows a balance of $19,960. It is discovered that additions to this account during the…arrow_forward
- Can you explain how properly complete this problem, I keep gtting it incorrect. At the end of 2021, Nash's Trading Post, LLC has accounts receivable of $635,600 and an allowance for doubtful accounts of $23,140. 1. On January 24, 2022, it is learned that the company’s receivable from Madonna Inc. is not collectible and therefore management authorizes a write-off of $4,210. 2. On March 4, 2022, Nash's Trading Post, LLC receives payment of $4,210 in full from Madonna Inc. Prepare the journal entries to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount 2. Enter an account title to record recovery of accounts receivable Enter a debit amount…arrow_forwardCompare Two Methods of Accounting for Uncollectible Receivables Cyber Space Company, which operates a chain of 65 electronics supply stores, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of uncollectible accounts, the firm is considering changing to the allowance method. Information is requested as to the effect that an annual provision of ½% of sales would have had on the amount of bad debt expense reported for each of the past four years. It is also considered desirable to know what the balance of Allowance for Doubtful Accounts would have been at the end of each year. The following data have been obtained from the accounts: Year Sales Accounts ReceivableWritten Off as Uncollectible 1 2 3 4 1. $2,300,000 $5,000 $5,000 2. 4,750,000 $9,000 $4,000 $5,000 3. 9,000,000 $23,000 $2,000 $12,000…arrow_forwardOn December 31, 2017, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2018, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $10,000. What amount would the company report as its net accounts receivable on December 31, 2017? Prepare the journal entry to write off the accounts on January 2, 2018. Assuming no other transactions occurred between December 31, 2017, and January 3, 2018, what amount would the company report as its net accounts receivable on January 3, 2018? Has net accounts receivable changed from December 31, 2017?arrow_forward
- You are assigned to audit Bonifacio Inc. for the year ending June 30, 2014. Prior to any adjustments you were able to extract the following balances from the client’s records:Accounts receivable, control account P221,250Allowance for doubtful accounts (7,500)Amortized cost P213,750arrow_forwardChipman Sofware recently reported the following amounts in its unadjusted trial balance at its year-end: Debits Credits Accounts Receivable $ 2,900 Allowance for Doubtful Accounts $ 20 Sales (assume all on credit) 43,000 Required: Prepare the adjusting journal entry required for the year. Assume Chipman uses 1/2 of 1 percent of sales to estimate its Bad Debt Expense for the year and no Bad Debt Expense has been recorded yet. Prepare the adjusting journal entry required for the year. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Assume instead that Chipman uses the aging of accounts receivable method and estimates that $79 of its Accounts Receivable will be uncollectible. Prepare the year-end adjusting journal entry for recording Bad Debt Expense. Assume Chipman's year-end unadjusted balance in Allowance for Doubtful Accounts was a debit balance of $40. If one of…arrow_forwardAging Receivables and Bad Debt Expense Perkinson Corporation sells paper products to a large number of retailers. Perkinsons accountant has prepared the following aging schedule for its accounts receivable at the end of the year. Before adjusting entries are entered, the balance in the allowance for doubtful accounts is a debit of $480. Required: 1. Calculate the desired postadjustment balance in Perkinsons allowance for doubtful accounts. 2. Determine bad debt expense for the year.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Current assets and current liabilities; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Jw4TaiP42P4;License: Standard youtube license