Cash equilvalents, allowance method, bad debt estimate

Related BrainMass Solutions

• What are different ways to estimate bad debt?

  What are the different ways to estimate bad debt? You can use a percent of sales (percentage of sales method) or use a percent of the receivables at year end (allowance account method).

• Calculation of debt debt expense, writing off receivables

  180256 Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end.

• Aaliyah Company Adjusting Entries for Bad Debt Expense

  Thus, Cash sales $ 1,591,700 Credit sales 2,389,000 Total sales $ 3,980,700 Total sales $3,980,700 Bad debt percentage x .03 Bad debt expense $ 119,421 ($3,980,700*.03)

• Discuss the allowance method and the direct write-off method

  For instance, an established company can rely on past experience to help them estimate bad debt so they can gage or estimate the bad debt before it happens.

• Accounts Receivable Structured Manners

  Under the allowance method, bad debt expense is recognized immediately, whereas under the write-off method the bad debt expense is recognized when the bad debt actually occurs. This is normally delayed.

• Jestin Company: What was the balance in the Accounts Receivable account at the end of Year 5?

  What was bad debt expense [or, the amount of the Revenue Contra for Uncollectibles] for Year 6? The bad debt expense for the year 6 has been estimated by Justin to be $10,000. d.)

• Bad Debt Expense

  However, you will not necessarily charge off the entire 3% to Bad Debt Expense. When using the allowance method, you just need to bring the balance of the Allowance account up to that 3%.

• 7.10 7.12 Direct write-off method versus allowance method 7.13 Accounting for Uncollectible Receivables?Percentage of Sales Method 7.14 Comparing the Percentage of Sales and Percentage of Sales 7.15 Ratio Analysis

  The direct write off method results in the total bad debt expense of 12,000+7,500+10,000+12,000=41,500 If the allowance method is used the bad debt expense will be higher by 54,000-41,500=12,500 and the income before taxes will

• Accounts receivable and bad debt journal entries

  For percent of sales, the debit to bad debt expense is computed by some % x sales. For the percent of receivables method, the target ending balance in the allowance is computed using % x AR.