Question
In: Accounting
Which companies uses the allowance method for solving bad debts? How does that company estimate bad...
Which companies uses the allowance method for solving bad debts? How does that company estimate bad debts? Why isn't the direct write-off method accepted under GAAP?
Solutions
Expert Solution
PLEASE LIKE THE ANSWER IF YOU FIND IT HELPFUL OR YOU CAN COMMENT IF YOU NEED CLARITY / EXPLANATION ON ANY POINT.
ekkarill92 answered 1 year agoRelated Solutions
The Femaware Company uses the allowance method to account for bad debts. At the beginning of...
The Femaware Company uses the allowance method to account for
bad debts. At the beginning of year 1, the allowance account had a
credit balance of $66,844. Credit sales for year 1 totaled
$2,139,000 and the year end accounts receivable balance was
$436,713. During this year, $65,061 in receivables were determined
to be uncollectible. Femaware anticipates that 4% of all credit
sales will ultimately become uncollectible. The fiscal year ends on
December 31.
Required:
1. Does this situation describe a...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning...
The Manda Panda Company uses the allowance method to account for
bad debts. At the beginning of 2018, the allowance account had a
credit balance of $75,000. Credit sales for 2018 totaled $2,400,000
and the year-end accounts receivable balance was $490,000. During
this year, $73,000 in receivables were determined to be
uncollectible. Manda Panda anticipates that 3% of all credit sales
will ultimately become uncollectible. The fiscal year ends on
December 31.
Required:
1. Does this situation describe a loss...
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning...
The Manda Panda Company uses the allowance method to account for
bad debts. At the beginning of 2018, the allowance account had a
credit balance of $75,000. Credit sales for 2018 totaled $2,400,000
and the year-end accounts receivable balance was $490,000. During
this year, $73,000 in receivables were determined to be
uncollectible. Manda Panda anticipates that 3% of all credit sales
will ultimately become uncollectible. The fiscal year ends on
December 31.
Required:
1. Does this situation describe a loss...
plish Brothers Inc. uses the allowance method of accounting for bad debts. The company produced the...
plish Brothers Inc. uses the allowance method of accounting for
bad debts. The company produced the following aging of the accounts
receivable at year-end.
(a)
Calculate the total estimated bad debts based on the information
below.
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
Accounts receivable
$538,000
$374,000
$88,000
$40,000
$24,000
$12,000
% uncollectible
1%
4%
5%
7%
11%
Estimated bad debts
$enter estimated bad debts in dollars
$enter estimated bad debts in dollars
$enter estimated bad...
Splish Brothers Inc. uses the allowance method of accounting for bad debts. The company produced the...
Splish Brothers Inc. uses the allowance method of accounting for
bad debts. The company produced the following aging of the accounts
receivable at year-end.
(a)- ANSWERED- SCROLL TO QUESTION B
Correct answer iconYour answer is correct.
Calculate the total estimated bad debts based on the information
below.
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
Accounts receivable
$538,000
$374,000
$88,000
$40,000
$24,000
$12,000
% uncollectible
1%
4%
5%
7%
11%
Estimated bad debts
$enter estimated bad debts...
Buffalo Industries uses the allowance method of accounting for bad debts. The company produced the following...
Buffalo Industries uses the allowance method of accounting for
bad debts. The company produced the following aging of the accounts
receivable at year-end.
1.Calculate the total estimated bad debts based on the
information below.
# of days outstanding
total
0-30
31-60
61-90
91-120
over 120
Accounts receivable
$ 422,000
259,000
82,000
44,000
24,000
13,000
% uncollectible
1%
4%
5%
8%
11%
Estimated debt
2.Prepare the year-end adjusting journal entry to record the bad
debts using the aged uncollectible accounts receivable...
Blue Spruce Corp. uses the allowance method of accounting for bad debts. The company produced the...
Blue Spruce Corp. uses the allowance method of accounting for
bad debts. The company produced the following aging of the accounts
receivable at year-end.
Calculate the total estimated bad debts based on the information
below.
Number of Days Outstanding
Total
0–30
31–60
61–90
91–120
Over 120
Accounts receivable
$494,000
$325,000
$91,000
$50,000
$17,000
$11,000
% uncollectible
1%
4%
5%
8%
11%
Estimated bad debts
$enter estimated bad debts in dollars
$enter estimated bad debts in dollars
$enter estimated bad debts...
Compare and contrast the direct write-off method and the allowance method for bad debts. At a...
Compare and contrast the direct write-off method and
the allowance method for bad debts.
At a minimum, please consider the following in your
answer:
When is the expense for uncollected accounts receivable
recognized under each method?
Why is the direct write-off method not considered to
follow generally accepted accounting
How is the allowance method of accounting for bad debts different from the direct write off...
How is the allowance method of accounting for bad debts
different from the direct write off method? Which is the preferred
method? Why?
In what ways are accounts receivable similar to a note
receivable? How are they different?
Why might a company choose to issue a note receivable over an
account receivable?
How is the allowance method of accounting for bad debts different from the direct write off...
How is the allowance method of accounting for bad debts
different from the direct write off method? Which is the preferred
method? Why? In what ways are accounts receivable similar to a note
receivable? How are they different? Why might a company choose to
issue a note receivable over an account receivable?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe the espoused values of a company you have worked for (or been exposed to -...
- Can you explain to me the differnces in how we paid for the health care (access...
- Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure...
- Write a java code that could be used to show the simulation of a tornado. use...
- A Canadian company issues an 8-year term bond with face value of $1,000 and 6% coupon...
- 1. Consider the following nuclides: &
- In general, teams can be described three ways. Name and define each.
ADVERTISEMENT