Loose-leaf for Fundamentals of Financial Accounting
5th Edition
ISBN: 9781259115400
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 8, Problem 8.4ME
To determine
To prepare: The
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
On 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.
Â
Assume that on February 2, 2018, Extreme Fitness received a payment of $500 from one of the customers whose balance had been written off. Prepare the journal entries to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Adjusting 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…
The following transactions took place during 2020 for Webb Industries.  Â
1-1-2020 – established that $85,000 will be deemed to be uncollectable during 2020.
12-31-2020 – it was determined that $30,000 were actually to be written off as uncollectable accounts during 2020.
Please prepare both journal entries for Webb Industries assuming they use the Allowance Method for writing off Accounts Receivable. In the spirit of saving time, WELL-ORGANIZED T Accounts will be accepted.
Chapter 8 Solutions
Loose-leaf for 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 - Prob. 7QCh. 8 - What is the primary difference between accounts...Ch. 8 - What are the three components of the interest...Ch. 8 - Prob. 10Q
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. 8.1MECh. 8 - Evaluating the Decision to Extend Credit Last...Ch. 8 - Prob. 8.3MECh. 8 - Prob. 8.4MECh. 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. 8.10MECh. 8 - Prob. 8.11MECh. 8 - Recording Note Receivable Transactions RecRoom...Ch. 8 - Prob. 8.13MECh. 8 - Determining the Effects of Credit Policy Changes...Ch. 8 - Prob. 8.15MECh. 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 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 8 - Recording Write-Offs and Recoveries Prior to...Ch. 8 - Prob. 8.5ECh. 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 - Prob. 8.10ECh. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Recording Note Receivable Transactions, Including...Ch. 8 - Prob. 8.13ECh. 8 - Prob. 8.14ECh. 8 - Prob. 8.15ECh. 8 - Prob. 8.16ECh. 8 - (Supplement 8A) Recording Write-Offs and Reporting...Ch. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 8.2CPCh. 8 - Recording Notes Receivable Transactions Jung ...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Prob. 8.5CPCh. 8 - Recording Accounts Receivable Transactions Using...Ch. 8 - Prob. 8.2PACh. 8 - Prob. 8.3PACh. 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 Stinson...Ch. 8 - Accounting for Accounts and Notes Receivable...Ch. 8 - Prob. 8.5PBCh. 8 - Recording and Reporting Credit Sales and Bad Debts...Ch. 8 - Prob. 8.2COPCh. 8 - Recording Daily and Adjusting Entries Using FIFO...Ch. 8 - Prob. 8.1SDCCh. 8 - Comparing Financial Information Refer to the...Ch. 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
- Using the data in Exercise 9-11, assume that the allowance for doubtful accounts for Selbys Bike Co. had a debit balance of 7,200 as of December 31, 2016. Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Journalize the adjusting entry for uncollectible accounts as of December 31, 2016. Selbys Bike Co. is a wholesaler of motorcycle supplies. An aging of the companys accounts receivable on December 31, 2016, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31, 2016.arrow_forwardHardys Landscape Services total revenue on account for 2018 amounted to 273,205. The company, which uses the allowance method, estimates bad debts at percent of total revenue on account. Required Journalize the following selected entries: 2012 Dec. 12Record services performed on account for E. E. Morton, 245. 31Record the adjusting entry for Bad Debts Expense. 31Record the closing entry for Bad Debts Expense. 2013 Feb. 18Write off the account of E. E. Morton as uncollectible, 245. Check Figure Adjusting entry amount, 1,366.03arrow_forwardRefer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.arrow_forward
- A Scarlet Company received an invoice for $71,000.00 that had payment terms of 4/5 n/30. If it made a partial payment of $14,700.00 during the discount period, calculate the balance of the invoice. Â B Three invoices for the amounts of $34,800, $24,000, and $41,550 were received on August 25, 2014, September 24, 2014, and October 17, 2014, respectively. If the payment terms are 3/7, 2/30, n/60, calculate the amount that must be paid on October 24, 2014 to settle all three invoices.arrow_forwardMinnie has asked you to review the methods Min Armin Wastege uses when dealing with Accounts Receivable. Minnie has compiled the following information for the past 2 months andwants you to update her records on August 31, 2020.On June 30, 2020 the Account Receivable balance for Min Armin Wastege was $13,585 Dr withan Allowance for Doubtful Debts of $462 Cr. In the last two monthsSales (net of GST)S4 800Sales Returns & Allowances (net of GST) 400Cash Collected3 550Bad Debts to be written off (Including GST) 660The bad debts listed above have not been written off as yet. Minnie has also calculated based on past experience that 7% of net credit sales go bad. All sales are made on credit. REQUIRED:Prepare the following General Journal entries to1. account for the write off of the bad debt during the past two months2. the adjusting entry on August 31 using the information Minnie has provided. b. Update the Accounts Receivable and Allowance for doubtful debts accounts.arrow_forwardOn December 31, 2014, Extreme Fitness has adjusted balances of $800,000 in Accounts Receivable and $55,000 in Allowance for Doubtful Accounts. On January 2, 2015, the company learnsthat certain customer accounts are not collectible, so management authorizes a write-off of theseaccounts totaling $10,000.a. Show how the company would have reported its receivable accounts on December 31, 2014.As of that date, what amount did Extreme Fitness expect to collect?b. Prepare the journal entry to write off the accounts on January 2, 2015.c. Assuming no other transactions occurred between December 31, 2014, and January 3, 2015,show how Extreme Fitness would have reported its receivable accounts on January 3, 2015.As of that date, what amount did Extreme Fitness expect to collect? Has this changed fromDecember 31, 2014? Explain why or why notarrow_forward
- Slow Running Shoes uses the Aging of receivables method to account foruncollectible accounts.o The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500(credit)o The balance in the Accounts Receivable account as at Jan 1st, 2010 was $133,000.The company completed the following transactions during 2010 and 2011:2010June 10th Wrote off the balance of $600 from MannyMiller’s account as uncollectibleSeptember 15thRe-instated the account of Betty Lou andrecorded the collection of $1200 as paymentin full for her account which had been writtenoff earlierDecember 31st Recorded the uncollectible account expensebased on the aging schedule. The scheduleshowed that $14,100 of accounts receivablewas estimated as uncollectibleDecember 31st Made the closing entry for the uncollectibleexpense account2011Jan 17Sold inventory to Jack Frost, $1100, onaccountAugust 15Wrote off as uncollectible the accounts ofBarry Semper, $1,500; Maria Jesus $1,400and Rory Paul $200September…arrow_forwardSlow Running Shoes uses the Aging of receivables method to account foruncollectible accounts.o The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500(credit)o The balance in the Accounts Receivable account as at Jan 1st, 2010 was $133,000.The company completed the following transactions during 2010 and 2011:2010June 10th Wrote off the balance of $600 from MannyMiller’s account as uncollectibleSeptember 15thRe-instated the account of Betty Lou andrecorded the collection of $1200 as paymentin full for her account which had been writtenoff earlierDecember 31st Recorded the uncollectible account expensebased on the aging schedule. The scheduleshowed that $14,100 of accounts receivablewas estimated as uncollectibleDecember 31st Made the closing entry for the uncollectibleexpense account2011Jan 17Sold inventory to Jack Frost, $1100, onaccountAugust 15Wrote off as uncollectible the accounts ofBarry Semper, $1,500; Maria Jesus $1,400and Rory Paul $200September…arrow_forwardOkay, I have everything else in the journal entry except for the last one. I'm attaching a picture of what I've got so you don't have to worry about explaining all of that. Here's the original (complete) problem: Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2018: Mar.  17  Accounts receivable of $1,700 were written off as uncollectible. The company uses the allowance method.   30  Loaned an officer of the company $20,000 and received a note requiring principal and interest at 7% to be paid on March 30, 2019. May  30  Discounted the $20,000 note at a local bank. The bank’s discount rate is 8%. The note was discounted without recourse and the sale criteria are met. June  30  Sold merchandise to the Blankenship Company for $12,000. Terms of the sale are 2/10, n/30. Weldon uses the gross method to account for cash discounts. July  8  The Blankenship Company paid its account in…arrow_forward
- The following are trial balance and adjustment data for Zubair's Shop on December 31,2010Particulars Debit CreditCash 9,200Accounts Receivable 21,400Inventory Jan 1 3,200Prepaid Rent 1,800Furniture 12,000Accumulated Depreciation 2,400Unearned Commission 3,600Capital, Zain 48,400Sales 30,000Sales Discount 300Purchases 32,000Purchases Return 500Transportation-in 500Salaries Expenses 3,300Rent Expenses 1,200Additional Information• Account receivable was expected to realize Rs. 20,000• Book value of furniture was estimated at Rs.9,000• Rent was prepaid to the extent of Rs.600• Commission earned during the year amounted to Rs. 2,400• Actual Salaries expenses for the year amounted Rs. 4,800 • Merchandise Inventory on December 31,2010 was valued at Rs. 8,800Requireda) Prepared Income Statement for the year ended December 31, 2021 (5)b) Prepared Balance Sheet as on December 31, 2021arrow_forwardJournalize the following transactions using the allowance method of accounting foruncollectible receivables:Sep 1. Received $600 from Jane and wrote off the remainder owed of $1350 as uncollectible.Nov15.Reinstated the account Jane that had been written off on Sep 1 and received $1350 cash in full payment.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
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License