FINANCIAL&MANAGERIAL ACCOUNTING(LL)W/AC
15th Edition
ISBN: 9781337955447
Author: WARREN/TAYLOR
Publisher: CENGAGE L
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Chapter 8, Problem 9E
Estimating allowance for doubtful accounts
Evers Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 8-8.
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Estimating Allowance for Doubtful Accounts
Kirchhoff Industries has a past history of uncollectible accounts, as shown below.
Age Class
Not past due
1-30 days past due
31-60 days past due
61-90 days past due
Over 90 days past due
Customer
Subtotals
Conover Industries
Keystone Company
Moxie Creek Inc.
Rainbow Company
Swanson Company
Total receivables
Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.
Kirchhoff Industries
Aging of Receivables Schedule
Percentage uncollectible
Percent
Uncollectible
Allowance for Doubtful Accounts
2%
6
20
Balance
30
45
Not Past 1-30 Days 31-60 Days 61-90 Days Over 90 Days
Due Past Due Past Due
798,900 471,400 175,800
Past Due
Past Due
71,900
17,900
20,700
6,700
9,500
26,300
26,300
880,000 497,700 185,300
2%
6%
9,500
6,700
78,600
20%
39,900
20,700
60,600
30%
39,900
17,900
57,800
45%
Background imformation:
The Lake Lucerne Company uses the allowance method of estimating bad debts expense. An aging schedule is prepared in order to calculate the balance in the allowance account.
The percentage uncollectible is calculated as followed:
1-30 days= 1.5%
31-60 days= 3.5%
61-90 days= 12%
91-365 days= 70%
Calculate the number of days each receivable is outstanding and Complete the Schedule of Accounts Receivable. Both are showed in the images attached for context and data. Make sure to show all work and formulas.
Kirchhoff Industries has a past history of uncollectible accounts, as shown below.
Age Class
PercentUncollectible
Not past due
2%
1-30 days past due
6
31-60 days past due
25
61-90 days past due
35
Over 90 days past due
50
Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.
Kirchhoff IndustriesAging of Receivables Schedule
Customer
Balance
Not PastDue
1-30 DaysPast Due
31-60 DaysPast Due
61-90 DaysPast Due
Over 90 DaysPast Due
Subtotals
553,700
326,700
121,800
49,800
27,700
27,700
Conover Industries
18,900
18,900
Keystone Company
22,000
22,000
Moxie Creek Inc.
4,800
4,800
Rainbow Company
12,000
12,000
Swanson Company
27,700
27,700
Total receivables
639,100
354,400
133,800
54,600
49,700
46,600
Percentage uncollectible
2%
6%
25%
35%
50%
Allowance for Doubtful Accounts
fill in the blank 1
fill in the blank 2
fill in the blank 3…
Chapter 8 Solutions
FINANCIAL&MANAGERIAL ACCOUNTING(LL)W/AC
Ch. 8 - What are the three classifications of receivables?Ch. 8 - Dans Hardware is a small hardware store in the...Ch. 8 - What kind of an account (asset, liability, etc.)...Ch. 8 - After the accounts are adjusted and closed at the...Ch. 8 - A firm has consistently adjusted its allowance...Ch. 8 - Which of the two methods of estimating...Ch. 8 - Neptune Company issued a note receivable to...Ch. 8 - If a note provides for payment of principal of...Ch. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Direct write-off method Journalize the following...Ch. 8 - Allowance method Journalize the following...Ch. 8 - Percent of sales method At the end of the current...Ch. 8 - Analysis of receivables method At the end of the...Ch. 8 - Note receivable Prefix Supply Company received a...Ch. 8 - Accounts receivable turnover and days sales in...Ch. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Entries for uncollectible accounts, using direct...Ch. 8 - Entries for uncollectible receivables, using...Ch. 8 - Entries to write off accounts receivable Creative...Ch. 8 - Providing for doubtful accounts At the end of the...Ch. 8 - Number of days past due Toot Auto Supply...Ch. 8 - Aging of receivables schedule The accounts...Ch. 8 - Estimating allowance for doubtful accounts Evers...Ch. 8 - Adjustment for uncollectible accounts Using data...Ch. 8 - Estimating doubtful accounts Outlaw Bike Co. is a...Ch. 8 - Entry for uncollectible accounts Using the data in...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Effect of doubtful accounts on net income During...Ch. 8 - Effect of doubtful accounts on net income Using...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Determine due date and interest on notes Determine...Ch. 8 - Entries for notes receivable Valley Designs issued...Ch. 8 - Entries for notes receivable The series of five...Ch. 8 - Entries for notes receivable, including year-end...Ch. 8 - Entries for receipt and dishonor of note...Ch. 8 - Entries for receipt and dishonor of notes...Ch. 8 - Prob. 25ECh. 8 - Allowance method entries The following...Ch. 8 - Aging of receivables; estimating allowance for...Ch. 8 - Compare two methods of accounting for...Ch. 8 - Details of notes receivable and related entries...Ch. 8 - Notes receivable entries The following data relate...Ch. 8 - Sales and notes receivable transactions The...Ch. 8 - Allowance method entries The following...Ch. 8 - Aging of receivables; estimating allowance for...Ch. 8 - Compare two methods of accounting for...Ch. 8 - Prob. 4PBCh. 8 - Prob. 5PBCh. 8 - Prob. 6PBCh. 8 - Prob. 1MADCh. 8 - Analyze Ralph Lauren Ralph Lauren Corporation (RL)...Ch. 8 - Analyze L Brands L Brands, Inc. (LB) sells womens...Ch. 8 - Compare Ralph Lauren and L Brands Use the data in...Ch. 8 - Prob. 5MADCh. 8 - Prob. 1TIFCh. 8 - Interest computations Bev Wynn, vice president of...Ch. 8 - Prob. 4TIFCh. 8 - Allowance for doubtful accounts For several years,...
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