Concept explainers
Accounts receivable
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Bad debt expense:
Bad debt expense is an expense account. Amount of loss incurred from extending credit to the customers are recorded as bad debt expense. In other words, estimated uncollectible accounts receivable are known as bad debt expense. To match the revenues and expenses,
Percentage-of-receivables basis:
It is a method of estimating the bad debts (loss on extending credit), by multiplying the expected percentage of uncollectible with the total amount of receivables for a specific period.
To Prepare: The
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FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
- Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. (a) Credit balance of $200 in Allowance for Doubtful Accounts just prior to adjustment. Analysis of Accounts Receivable indicates uncollectible receivables of $8,000. (b) Credit balance of $2000 in Allowance for Doubtful Accounts just prior to adjustment. Uncollectible receivables are estimated at 2% of credit sales, which totaled $1,000,000 for the year.arrow_forwardMazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $104,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,777 credit balance before the adjustment. (b) a $523 debit balance before the adjustment.arrow_forwardMazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $60,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,029 credit balance before the adjustment. (b) a $303 debit balance before the adjustment. View transaction list Journal entry worksheet Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $1,029 credit balance before the adjustment. Note: Enter debits before credits. General Journal Debit Credit Transaction (a) Cle ntearrow_forward
- Can i get help determining the attached image?arrow_forwardMazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $68,000, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,156 credit balance before the adjustment. (b) a $340 debit balance before the adjustment. View transaction list Journal entry worksheetarrow_forwardDetermine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. (a) Credit balance of $300 in Allowance for Doubtful Accounts just prior to adjustment. Analysis of Accounts Receivable indicates uncollectible receivables of $8,920. Amount added: $ Ending balance: $_________ (b) Credit balance of $300 in Allowance for Doubtful Accounts just prior to adjustment. Uncollectible receivables are estimated at 3% of credit sales, which totaled $1,012,000 for the year. Amount added: $ Ending balance: $_________arrow_forward
- Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $64,000, and it estimates that 6% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,088 credit balance before the adjustment. (b) a $320 debit balance before the adjustment. View transaction list Journal entry worksheet 1 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $1,088 credit balance before the adjustment. Note: Enter debits before credits. Transaction (a) General Journal Bad debts expense Debit Creditarrow_forwardMazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $108,500, and it estimates that 5% will be uncollectible.Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,845 credit balance before the adjustment. (b) a $543 debit balance before the adjustment.arrow_forwardUsing the % of aging-of-accounts receivable to estimate uncollectible accounts, The Valley Corporation estimates a target balance of $10,626 of its total accounts receivable that will be uncollectible. Prior to adjustment, the Allowance for Uncollectible accounts has a credit balance of $3,000. When recording the journal entry to make this adjustment, what is the amount of the debit for bad debt expense? Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123 ASUS f4 f5 f6 f7 f8 f9 f10 f11 E3 & 4. 5 7 8. T Y 61 16 R %24arrow_forward
- es Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $85,000, and it estimates that 4% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,445 credit balance before the adjustment. (b) a $425 debit balance before the adjustment. View transaction list Journal entry worksheet 1 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $1,445 credit balance before the adjustment. Note: Enter debits before credits. Transaction (a) Record entry General Journal Clear entry Debit Credit View general journal 7arrow_forwardTanning Company analyzes its receivables to estimate uncollectible accounts. The accounts receivable balance is $368,000 and credit sales are $1,000,000. An aging of accounts receivable estimates that $29,440 of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? a. Account Debit Credit Bad Debt Expense 29,440 Allowance for Doubtful Accounts 29,440 b. Account Debit Credit Bad Debt Expense 27,440 Allowance for Doubtful Accounts 27,440 c. Account Debit Credit Bad Debt Expense 94,320 Allowance for Doubtful Accounts 94,320 d. Account Debit Credit Bad Debt Expense 31,440 Allowance for Doubtful Accounts 31,440arrow_forwardCoronet Suppliers uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $80,500, and it estimates that 3% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Account has: (a) a $1,369 credit balance before the adjustment. (b) a $403 debit balance before the adjustment. View transaction list Journal entry worksheet 1 2 Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has a $1,369 credit balance before the adjustment. ansaction (a) te: Enter debits before credits. General Journal Debit Creditarrow_forward
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning