E9-20 Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance...

E9-20 Accounting for uncollectible accounts using the allowance method (aging-of-receivables) and reporting receivables on the balance sheet

Expert Solution

Allowance method (Aging of receivables ) , in this method of accounint the firm will make the provission on the basis of his
past expreiances on uncollectable amount. In this method we can make a provission of the uncollectable account and debit
the expenses with same amount and create a liability for the same.

So, This amount of uncollectable will be presented in balance sheet as below,

	Account Receivable	XXXX
	Less: Allowance for Doubtfull Debts	XXXX
	Net Account Receivables	XXXX


	Example :

	Below is example of recording of allwance for doubtfull accont

	CALCULATION OF PROVISION OF BAD DEBTS FOR THE YEAR END
	Age Group	Account Receivable	X by % uncollectable	Estimated Uncollectable
	Not Due Yet	XXXX	XXXX	XXXX
	1 to 30 Days Past Due	XXXX	XXXX	XXXX
	31 to 60 Days Past Due	XXXX	XXXX	XXXX
	61 to 90 Days Past Due	XXXX	XXXX	XXXX
	Over 90 Days Past Due	XXXX	XXXX	XXXX

	Total			XXXX



Journal Entries
Date	Account Title and explanation	Debit	Credit

	Bad Debt Expenses	XXXXXX
	To Allowance for Doubtful Debts		XXXXXX

ekkarill92 answered 1 year ago

Accounting for uncollectible accounts using the allowance method (percent-of-receivables) and reporting receivables on the balance sheet...

Accounting for uncollectible accounts using the allowance method (percent-of-receivables) and reporting receivables on the balance sheet At January 1, 2016, Carl's Garage had Accounts Receivable of $ 34,000 and Allowance for Bad Debts had a credit balance of $ 3,000. During the year, Carl's Garage recorded the following: a. Sales of $189,000 ($165,000 on account; $ 24,000 for cash). b. Collections on account, $ 133,000. c. Write-offs of uncollectible receivables, $ 2,800. Requirements 1. Journalize Carl’s transactions that occurred during...

Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet...

Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet At January 1, 2013, Mary's Local Store had Accounts Receivable of $ 34,000 and Allowance for Bad Debts had a credit balance of $ 3,000. During the year, Mary's Local Store recorded the following: a. Sales of $189,000 ($165,000 on account; $ 24,000 for cash). b. Collections on account, $ 133,000. c. Write-offs of uncollectible receivables, $ 2,800. Requirements 1. Journalize Mary’s transactions that...

Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct....

Allowance Method Journalize the following transactions, using the allowance method of accounting for uncollectible receivables: Oct. 2. Received $2,450 from Paula Spitler and wrote off the remainder owed of $3,580 as uncollectible. If an amount box does not require an entry, leave it blank. Oct. 2 Cash Allowance for Doubtful Accounts Accounts Receivable-Paula Spitler Feedback When a customer account is identified as uncollectible, it is written-off against the allowance account. Dec. 20. Reinstated the account of Paula Spitler and received...

Uncollectible Receivables, Using Allowance Method Illustrate the effects on the accounts and financial statements of the...

Uncollectible Receivables, Using Allowance Method Illustrate the effects on the accounts and financial statements of the following transactions in the accounts of Kitchen Depot Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. July 3. Received $2,500 on an account. Statement of Cash...

Aging of Receivables; estimating allowance for doubtful accounts Aging of receivables; estimating allowance for doubtful accounts...

Aging of Receivables; estimating allowance for doubtful accounts Aging of receivables; estimating allowance for doubtful accounts Fishy Fish company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Fishy Fish prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2015: A B C D E F G H 1 Not past Due Days Past Due 2 3 Customer Balance...

**11 spots in the journal Using the allowance method of accounting for uncollectible receivables. Apr. 1...

**11 spots in the journal Using the allowance method of accounting for uncollectible receivables. Apr. 1 Sold merchandise on account to Jim Dobbs, $8,700. The cost of the merchandise is $6,000. June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder. Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment. Required: Journalize the above transactions. Refer to the Chart of Accounts for exact wording of account titles. CHART...

Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold...

Journalize the following transactions using the allowance method of accounting for uncollectible receivables. April 1 Sold merchandise on account to Jim Dobbs, $7,770. The cost of the merchandise is $3,885. April 1 April 1 June 10 Received $2,590 from Jim Dobbs and wrote off the remainder owed of $5,180. If an amount box does not require an entry, leave it blank or enter "0". June 10 Oct. 11 Reinstated the account of Jim Dobbs and received $5,180 cash in full...

Create an example of how to estimate and record uncollectible accounts using the AGING OF RECEIVABLES...

Create an example of how to estimate and record uncollectible accounts using the AGING OF RECEIVABLES METHOD by addressing the following points: 1. Calculate your estimate and include all detail to support your calculation. 2. What account should be DEBITED, and for how much money? 3. What account should be CREDITED, and for how much money?

(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 accounts previously written off as uncollectible were $8,100....

Under the allowance method for uncollectible accounts

Under the allowance method for uncollectible accounts (a) the net realizable value of accounts receivable is greater before an account is written off than after it is written off. (b) Bad Debts Expense is debited when a specific account is written off as uncollectible. (c) the net realizable value of accounts receivable in the statement of financial position is the same before and after an account is written off. (d) Allowance for Doubtful Accounts is closed each year to Income...

Question