Question

In: Accounting

At the end of the current year, Accounts Receivable has a balance of $3,000,000; Allowance for...

At the end of the current year, Accounts Receivable has a balance of $3,000,000; Allowance for Doubtful Accounts has a debit balance of $475,000; and Net Sales for the year total $6,500,000. Bad Debt Expense is estimated at 3/4 of 1% of Net Sales.

  1. Calculate the dollar amount required to record the allowance amount.
  2. Prepare the adjusting journal entry for the Allowance for Doubtful Accounts:

Date

Accounts

Dr

Cr
  1. Calculate the Net Accounts Receivable Balance

Solutions

Expert Solution

Working Notes: 1
CALCULATION OF ALLOWANCE ACCOUNT ON THE BASIS OF % OF NET SALES
Net Sales $            6,500,000
1% of net sales 1%
Estimated amount $                  65,000
Estimated amount of uncollectable = ($ 65,000 X 3 /4) $                  48,750
Working Notes: 2
CALCULATION OF BAD DEBT EXPENSES OF THE YEAR
Estiamted amount of uncollectable of the year $                  48,750 Credit
Add: Allowance for Doubtfull Debts (Opening Bal.) $                475,000 Debit  
Balance need to be make entry of Bad Debt $                523,750 Credit
Bad debts expenses recognise in the year = $                523,750
SOLUTION: 1
Journal Entries
Date Account Title and explanation Debit Credit
------- Bad Debt Expenses $                523,750
       Allowance for Doubtful Account $                  523,750
(To record the bad debt Expenses)
SOLUTION: 2
CALCULATION OF NET ACCOUNT RECEIVABLE
Account Receivable $            3,000,000
Less: Allowance for Doubtfull Account $                523,750
Net Account Receivable $            2,476,250

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

At the end of the current year, Accounts Receivable has a balance of $969,540 Allowance for...
At the end of the current year, Accounts Receivable has a balance of $969,540 Allowance for Doubtful Accounts has a credit balance of $5,287 and sales for the year total $2,224,000. Bad debt expense is estimated at ½ of 1% of sales. a. Determine the amount of the adjusting entry for bad debt expense. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Accounts Receivable $ Allowance for Doubtful Accounts...
At the end of the current year, Accounts Receivable has a balance of $98,880; Allowance for...
At the end of the current year, Accounts Receivable has a balance of $98,880; Allowance for Doubtful Accounts has a debit balance of $3,556; and sales for the year total $1,108,000. Bad debt expense is estimated at 1/2 of 1% of sales. a. Determine the amount of the adjusting entry for bad debt expense. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Accounts Receivable$ Allowance for Doubtful Accounts Bad...
At the end of the current year, Accounts Receivable has a balance of $803,120; Allowance for...
At the end of the current year, Accounts Receivable has a balance of $803,120; Allowance for Doubtful Accounts has a credit balance of $5,189; and sales for the year total $2,213,000. Bad debt expense is estimated at 1/2 of 1% of net sales. a. Determine the amount of the adjusting entry for bad debt expense. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Accounts Receivable $ Allowance for Doubtful...
At the end of the current year, the accounts receivable account has a debit balance of...
At the end of the current year, the accounts receivable account has a debit balance of $932,000 and sales for the year total $10,570,000. The allowance account before adjustment has a debit balance of $12,600. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a debit balance of $12,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $40,300. The allowance account before adjustment has a credit...
At the end of the current year, the accounts receivable account has a debit balance of...
At the end of the current year, the accounts receivable account has a debit balance of $1,095,000 and sales for the year total $12,420,000. The allowance account before adjustment has a debit balance of $14,800. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $14,800. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $47,400. The allowance account before adjustment has a credit...
Problem 2.            At the end of the current year, Accounts Receivable has a balance of...
Problem 2.            At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and net sales for the year total $2,500,000. Using the aging method (analysis of receivables), the proper balance of Allowance for Doubtful Accounts is estimated as $25,000. Determine the amount of the adjusting entry for uncollectible accounts and journalize the entry. Date                      Account Title                                               Debit                   Credit Determine the adjusted balances of the following...
At the end of the current year, the accounts receivable account has a debit balance of...
At the end of the current year, the accounts receivable account has a debit balance of $777,000 and sales for the year total $8,810,000. The allowance account before adjustment has a debit balance of $10,500. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $10,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $33,600. The allowance account before adjustment has a credit...
A company’s year-end balance in accounts receivable is $2,000,000. The allowance for uncollectible accounts had a...
A company’s year-end balance in accounts receivable is $2,000,000. The allowance for uncollectible accounts had a beginning-of-year credit balance of $30,000. An aging of accounts receivable at the end of the year indicates a required allowance of $38,000. If bad debt expense for the year was $40,000 and if credit sales for the year were $8,200,000 and $7,950,000 was collected from credit customers, what was the beginning-of-year balance in accounts receivable?
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance...
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $680,000; Allowance for Doubtful Accounts has a debit balance of $6,000; and sales for the year total $3,060,000. Bad debt expense is estimated at 1/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Accounts Receivable $ Allowance for Doubtful...
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance...
Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $840,000; Allowance for Doubtful Accounts has a credit balance of $7,500; and sales for the year total $3,780,000. Bad debt expense is estimated at 3/4 of 1% of sales. a. Determine the amount of the adjusting entry for uncollectible accounts. $ b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense. Adjusted Balance Debit (Credit) Accounts Receivable...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT