Question

In: Accounting

LaFond Company analyzes its accounts receivable at December 31, 2016, and arrives at the aged categories...

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
Mark 0.00 out of 1.00

Answer

Correct
Mark 1.00 out of 1.00

Balance Answer

Incorrect
Mark 0.00 out of 1.00

Answer

Correct
Mark 1.00 out of 1.00

Allow. For Uncoll. Accounts
Beg. Bal. Answer

Incorrect
Mark 0.00 out of 1.00

Answer

Incorrect
Mark 0.00 out of 1.00

Write-off Answer

Incorrect
Mark 0.00 out of 1.00

Answer

Incorrect
Mark 0.00 out of 1.00

(a) Answer

Correct
Mark 1.00 out of 1.00

Answer

Incorrect
Mark 0.00 out of 1.00

Balance Answer

Correct
Mark 1.00 out of 1.00

Answer

Solutions

Expert Solution

  • Workings

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

  • [a]

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

  • [b]

Accounts receivables

$381,000

Less: Allowance accounts

$3,950

Balance of accounts receivables to be reported

$377,050

  • [c]

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


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