In: Accounting
LaFond Company analyzes its accounts receivable at December 31, 2016, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
Age Group | Accounts Receivable | Estimated Loss % |
---|---|---|
Current (not past due) | $250,000 | 0.20% |
1-30 days past due | 90,000 | 1.0 |
31-60 days past due | 20,000 | 2.0 |
61-120 days past due | 11,000 | 5.0 |
121-180 days past due | 6,000 | 10.0 |
Over 180 days past due | 4,000 | 25.0 |
Total accounts receivable | $381,000 |
At the beginning of
the fourth quarter of 2016, there was a credit balance of $4,390 in
the Allowance for Uncollectible Accounts. During the fourth
quarter, LaFond Company wrote off $3,790 in receivables as
uncollectible.
a. What amount of bad debts expense will LaFond report for
2016?
$Answer
Incorrect
Mark 0.00 out of 1.00
b. What is the balance of accounts receivable that it reports on
its December 31, 2016, balance sheet?
$Answer
Incorrect
Mark 0.00 out of 1.00
c. Set up T-accounts for both Bad Debts Expense and for the
Allowance for Uncollectible Accounts. Enter any unadjusted balances
along with the dollar effects of the information described
(including your results from parts a and b).
Bad Debts Expense | |||
---|---|---|---|
(a) |
Answer
Incorrect |
Answer
Correct |
|
Balance |
Answer
Incorrect |
Answer
Correct |
Allow. For Uncoll. Accounts | |||
---|---|---|---|
Beg. Bal. |
Answer
Incorrect |
Answer
Incorrect |
|
Write-off |
Answer
Incorrect |
Answer
Incorrect |
|
(a) |
Answer
Correct |
Answer
Incorrect |
|
Balance |
Answer
Correct |
Answer |
Age Group |
Accounts Receivable |
Estimated Loss % |
Estimated uncollectibles |
Current (not past due) |
$250,000 |
0.20% |
$500 |
1-30 days past due |
$90,000 |
1 |
$900 |
31-60 days past due |
$20,000 |
2 |
$400 |
61-120 days past due |
$11,000 |
5 |
$550 |
121-180 days past due |
$6,000 |
10 |
$600 |
Over 180 days past due |
$4,000 |
25 |
$1,000 |
Total accounts receivable |
$381,000 |
$3,950 |
Beginning Allowance account |
$4,390 |
Accounts written off |
($3,790) |
Unadjusted Allowance account balance |
$600 |
Estimated Uncollectible accounts |
$3,950 |
Bad Debt Expense [$3950 - 600] |
$3,350 |
Accounts receivables |
$381,000 |
Less: Allowance accounts |
$3,950 |
Balance of accounts receivables to be reported |
$377,050 |
Bad Debts Expense |
|||
(a) |
$3,350 |
0 |
|
Balance |
$3,350 |
0 |
|
Allow. For Uncoll. Accounts |
|||
Beg. Bal. |
0 |
4390 |
|
Write-off |
$3,790 |
0 |
|
(a) |
0 |
$3,350 |
|
Balance |
0 |
$3,950 |