Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) b b. Assets Allowance for Doubtful Accounts Accounts Receivable Allowance for Doubtful Accounts (11,650) (2.900) 2,900 W Liabilities Bad Debt Expense

Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or-for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) b b. Assets Allowance for Doubtful Accounts Accounts Receivable Allowance for Doubtful Accounts (11,650) (2.900) 2,900 W Liabilities Bad Debt Expense

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 15PB: Shimmer Products is considering which bad debt estimation method works best for its company. It is...

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Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Organics Plus is considering which bad debt estimation method works best for its company. It is deciding between the income statement method, balance sheet method of receivables, and balance sheet aging of receivables method. If it uses the income statement method, bad debt would be estimated at 4% of credit sales. If it were to use the balance sheet method, it would estimate bad debt at 12% of accounts receivable. If it were to use the balance sheet aging of receivables method, it would split its receivables into three categories: 0â€“30 days past due at 6%, 31â€“90 days past due at 19%, and over 90 days past due at 26%. There is currently a zero balance, transferred from the prior years Allowance for Doubtful Accounts. The following information is available from the year-end income statement and balance sheet. There is also additional information regarding the distribution of accounts receivable by age. Prepare the year-end adjusting entry for bad debt, using A. Income statement method B. Balance sheet method of receivables C. Balance sheet aging of receivables method. D. Which method should the company choose, and why?
E8-2 (Algo) Determining Financial Statement Effects of Bad Debt Expense Estimates and Write-Offs (LO 8-2] Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,350. The account had an unadjusted credit balance of $11,800 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2.800 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) 1 100 b b Assets Liabilities Stockholders' Equity
E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $51,900; (2) up to 180 days past due, $15,800; and (3) more than 180 days past due, $5,300. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2) 11 percent, and (3) 30 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet. Complete this question by entering your answers in the…
An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $3,871. If Allowance for Doubtful Accounts has a $990 debit balance, the adjustment to record the bad debt expense for the period will require a: a.credit to Allowance for Doubtful for $3,871. b.debit to Allowance for Doubtful Accounts for $4,861. c.debit to Bad Debt Expense for $4,861. d.debit to Allowance for Doubtful Accounts for $3,871.
E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $50,800; (2) up to 180 days past due, $15,600; and (3) more than 180 days past due, $4,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 2 percent, (2) 11 percent, and (3) 31 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of- period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet.
An aging of a company's accounts receivable indicates that the estimate of uncollectible receivables totals $4,269. If Allowance for Doubtful Accounts has a $1,349 credit balance, the adjustment to record the bad debt expense for the period will require a Oa. debit to Bad Debt Expense for $4,269. Ob. debit to Bad Debt Expense for $2,920. Oc. debit to Bad Debt Expense for $5,618. Od. credit to Allowance for Doubtful Accounts for $1,349.
E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 4% of receivables that are not yet due, 13% of receivables that are up to 180 days past due, and 31% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,100 that are up to 180 days past due, and $5,700 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet. Complete this question by entering your answers in the tabs below. Required 1…
Using the percentage of receivables method for recording bad debt expense, estimated uncollectible accounts are $11,000. If the balance of the Allowance for Doubtful Accounts is $2,800 debit before adjustment, what is the balance after adjustment? Select one: a. $11,000 b. $8,200 c. $13,800 d. $2,800 e. The answer does not exist
By the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $12,000. If the balance of the Allowance for Doubtful Accounts is $2,500 credit before adjustment, what is the amount of bad debt expense for that period? Select one: a. $9,500 b. The answer does not exist C. $14,500 d. $2,500 e. $12,000 Previous page Next page
An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $5,713. If Allowance for Doubtful Accounts has a $907 credit balance, the adjustment to record the bad debt expense for the period will require a Oa, debit to Bad Debt Expense for $4,806. Ob. credit to Allowance for Doubtful Accounts for $5,713. Oc. debit to Bad Debt Expense for $5,713. Od. debit to Bad Debt Expense for $907.
An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $4,703. If Allowance for Doubtful Accounts has a $884 credit balance, the adjustment to record the bad debt expense for the period will require a a.debit to Bad Debt Expense for $3,819. b.debit to Bad Debt Expense for $884. c.credit to Allowance for Doubtful Accounts for $4,703. d.debit to Bad Debt Expense for $4,703.