Question

In: Accounting

Young and Restless Corporation (YRC) uses two aging categories to estimate uncollectible accounts.

 

Young and Restless Corporation (YRC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered current and have a 5% uncollectible rate. Accounts more than 60 days are considered delinquent and have a 30% uncollectible rate.. YRC’s Allowance for Doubtful Accounts currently has an unadjusted credit balance of $551

If YRC has $54,080 of current accounts and $4,910 of delinquent accounts, how much should be reported in the Allowance for Doubtful Accounts? 54080*.05 + 4910*.30 -551 = 3626 IS WRONG

 

Assume Brandall Co. had credit sales of $157,502 and cost of goods sold of $56,648 for the period. Brandall uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a debit balance of $723.

What is the adjusted (ending) balance in the Allowance for Doubtful Accounts that Brandall would report on the Balance Sheet? $________ 157502*.01 = 1575.02 IS WRONG

 

Assume Brandall Co. had credit sales of $159,059 and cost of goods sold of $67,067 for the period. Brandall uses the percentage of credit sales method and estimates that 3 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $402.

What amount of Bad Debt Expense would the company record as an end-of-period adjustment? 159059*.03 - 402 IS WRONG

 

At the beginning of Year 3 Randall Company had a $17,020 balance in its accounts receivable account and a $1,330 balance in allowance for doubtful accounts. During Year 3, Randall experienced the following events.

(1) Randall earned $24,400 of revenue on account.

(2) Collected $17,770 cash from accounts receivable.

(3) Wrote-off $870 of accounts receivable as uncollectible.

Randall estimates uncollectible accounts to be 3% of receivables. Based on this information, the December 31, Year 3 the ending balance in the allowance for doubtful accounts account (balance after expense recognition) is $_________24400-17770-870 = 22780*.03 IS WRONG

Solutions

Expert Solution

ans 1 In this question balance of allowance for doubtful accounts is asked which is
54080*5% $2,704    
4910*30% $1,473    
Ending Balance of Allowance for Doubtful accounts $4,177    
The ending balance is this only      
       
For your understanding      
when we have to calculate bad debt expense in that case deduct 551  
Bad debt expenses are 4177-551 $3,626    
       
ans 2      
Allowance for Doubtful accounts      
Beginning bal ($723)    
1% of credit sale (157502*1%) $1,575.02    
Ending Balance of Allowance for Doubtful accounts $852.02    
If rounded off $852    
       
ans 3      
Bad debt expense would be calculated straight on % of credit sale  
159059*3% 4771.77    
       
ans 4      
Receivables are      
17020+24400-17770-870 22780    
3% of 22780 683.40    
       
Ending balance of allowance      
1330-870+683.4 $1143.4    
       
       
       
       

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