Question
In: Accounting
Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year...
Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $212,000 of services on account. In 2021, the company wrote off uncollectible accounts of $8,500. By the end of 2021, cash collections on accounts recelvable totaled $178,500. Pincus estimates that 5% of the accounts receivable balance at 12/31/2021 will prove uncollectible.
Required:
1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Solutions
ekkarill92 answered 2 years 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...
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?
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
Mel's Hardware uses the allowance method to determine their bad debt expense. The allowance for bad...
Mel's Hardware uses the allowance method to determine their bad
debt expense. The allowance for bad debts is based on the balance
in the accounts receivable account. Mel's hardware uses the rate of
0.75% of accounts receivable to determine the appropriate balance
in the allowance for doubtful accounts. The data collected from
Mel's Hardware is as follows.
A/R: $49,477.00
Allowance for doubtful accounts: debit $350.00
Credit sales: $144,554.00
Bad Debt Expense: -0-
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
- In C++ Having call-by-reference allows one to use storeback parameters, i.e., parameters whose values are transmitted...
ADVERTISEMENT