Question
In: Accounting
Grana Inc. uses the Aging of Accounts Receivable method for estimating uncollectible accounts. The accounting records...
Grana Inc. uses the Aging of Accounts Receivable method for estimating uncollectible accounts. The accounting records show the following information at the end of the year:
|
Number of Days Unpaid |
||||
|
0 - 30 |
31 - 60 |
61 - 90 |
Over 90 |
|
|
Accounts Receivable |
$370,000 |
$240,000 |
$110,000 |
$80,000 |
|
Estimated % Uncollectible |
10% |
15% |
25% |
5% |
If the unadjusted credit balance in the Allowance for Doubtful Accounts account before is $15,000, what would be the amount of the adjustment for bad debts?
| $45,000 |
| $34,500 |
| $79,000 |
| $64,000 |
Solutions
Expert Solution
| Option 4 | $64,000 |
| Grana Inc. | |||||
| Number of Days Unpaid | |||||
| 0 - 30 | 31 - 60 | 61 - 90 | Over 90 | Totals | |
| Accounts Receivable | 370,000 | 240,000 | 110,000 | 80,000 | |
| Estimated % Uncollectible | 5% | 10% | 15% | 25% | |
| Allowance for Doubtful Accounts | 18,500 | 24,000 | 16,500 | 20,000 | 79,000 |
| Calculation | =370,000*5% | =240,000*10% | =110,000*15% | =80,000*25% | |
| Allowance for Doubtful Accounts | |||||
| Adjusted credit balance | 79,000 | From above table | |||
| Unadjusted credit balance | (15,000) | ||||
| Adjustment for bad debts | 64,000 | ||||
ekkarill92 answered 3 years agoRelated Solutions
Grana Inc. uses the Aging of Accounts Receivable method for estimating uncollectible accounts. The accounting records...
Grana Inc. uses the Aging of Accounts Receivable method
for estimating uncollectible accounts. The accounting records show
the following information at the end of the year:
Number of Days Unpaid
0 - 30
31 - 60
61 - 90
Over 90
Accounts Receivable
$370,000
$240,000
$110,000
$80,000
Estimated % Uncollectible
10%
15%
25%
5%
If the unadjusted credit balance in the Allowance for
Doubtful Accounts account before is $15,000, what would be the
amount of the adjustment for bad debts?...
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Artis, Inc. uses the aging of accounts receivable method for
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Receivable was $17,800 of which $8,400 was 0 - 30 days old; $5,900
was 31 - 60 days old; and the remainder was over 60 days old. Artis
estimates 1% of accounts 0 - 30 days old will be uncollectible; 5%
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uncollectible. Allowance for Doubtful Accounts has a negative
unadjusted balance of $(1,600) at the end of the year. Determine
the amount of the adjustment to record the provision for doubtful
accounts.
Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began...
Domino Company uses the aging of accounts receivable method to
estimate uncollectible accounts expense. Domino began Year 2 with
balances in Accounts Receivable and Allowance for Doubtful Accounts
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wrote off $2,620 in uncollectible accounts. In preparation for the
company's Year 2 estimate, Domino prepared the following aging
schedule:
Number of
days
Receivables
% Likely to be
past due
amount
uncollectible
Current
$
70,000
1%
0-30
26,700
5%
31-60
6,760
10%...
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uncollectible, and wrote it off. Oct 15 Links Company determined
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Ditzler Company, a construction supply company, uses the
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Mar. 15 Accepted a 60-day, 12%
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$2500 account from Dorset Co. as uncollectible
Apr. 21 Loaned $7500 cash to
Jill Klein, receiving a 90-day,...
Ditzler Company, a construction supply company, uses the allowance method of accounting for uncollectible accounts receivable....
Ditzler Company, a construction supply company, uses the
allowance method of accounting for uncollectible accounts
receivable. Selected transactions completed by Ditzler company are
as follows:
Feb 1 Sold
merchandise on account to Ames Co., $8000. The cost of the
merchandise sold was $4500
Mar. 15 Accepted a 60-day, 12%
note for $8000 from Ames Co. on account
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________.
A) aging of accounts receivable
B) a percentage of credit sales
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D) the current balance in accounts receivable
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B) $1,600
C) $1,800
D) $2,000
Learning Objective 4-4
Credit card sales...
(Accounts receivable and uncollectible accounts—aging of receivables method) On December 31, 2019, Ajacks Company reported the...
(Accounts receivable and uncollectible accounts—aging of
receivables method)
On December 31, 2019, Ajacks Company reported the following
information in its financial statements:
Accounts receivable
$1,193,400
Allowance for doubtful accounts
81,648
Bad debts expense
80,448
During 2020, the company had the following transactions related
to receivables:
a. Sales were
$10,560,000, of which $8,448,000 were on account.
b. Collections of
accounts receivable were $7,284,000.
c. Writeoffs of
accounts receivable were $78,000.
d. Recoveries of
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Ervin Company uses the allowance method to account for uncollectible accounts receivable
Ervin Company uses the allowance method to account for
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