Purchase Solution

Garrels Company's Allowance for doubtful accounts

Not what you're looking for?

Ask Custom Question

Appearing next is information pertaining to Garrels Company's Allowance for doubtful accounts. Examine this information and answer the following questions.

2011 2010 2009
Allowance for doubtful accounts
Balance, beginning of year ? ? 1324
Provision charged to expense ? 502 1349
Write-offs, less recoveries 1 622 ?
Balance, end of year 1453 ? 1302

1. Solve for the unknowns in the preceding schedule.
2. Make all entries related to the Allowance for doubtful accounts account for 2009-2011.
3. Make all entries for bad debts for 2009-2011 assuming that Garrels did not accrue for estimated bad debt losses but instead recorded bad debt expense one receivables were determined to be uncollectible. (This is called the direct write-off method.)

4. why does GAAP require the allowance method over the direct write-off method?
5. Calculate the cumulative difference in reported pre-tax income under the allowance and direct write-off methods over the 2009-2011 period.

Attachments
Purchase this Solution
Solution Summary

Your tutorial is attached (in Excel) showing the two methods and how to solve for the missing pieces. Click in cells to see computations.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

View More Free Quizzes
Related BrainMass Solutions

  • Allowances

    577477 Allowances Allowances: Following is information for Garrels Company's Allowance for doubtful accounts. Examine this information and answer the following questions.

  • Allowance for Doubtful Accounts

    215664 The Allowance for Doubtful Accounts Please help me understand this problem. I do not understand the mythology when talking about Accounts Receivable and the Allowance for Doubtful Accounts.

  • Ledger of Houston's Company

    Allowance for Doubtful Accounts 8,000 Accounts Receivable 8,000 Part C - If the company's Allowance for Doubtful Accounts has a credit balance of $500 in the Trial Balance, prepare the journal entries if the write off for Bad Debt Expense

  • Percentage of Sales vs. Percentage of Receivables

    Any difference between the beginning doubtful accounts and this TOTAL is the company's doubtful accounts expense for the period.

  • Journal entry for bad debt write-off

    The journal entry is Allowance for Doubtful Accounts Dr 6,000 Accounts Receivable Cr 6,000 (b) What is the net realizable value of Aramis Company's accounts receivable before the write-off of the Ramirez receivable?

  • Adjusting entries to record bad debts expense

    for Doubtful Accounts 1,200 Allowance for Doubtful Accounts 6,800 Accounts Receivable 6,800.

  • Uncollectibe receivables

    Please see the attached file QS 9-3: Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $28,000.

  • Solve: Recording Bad Debts

    The journal entry is: Allowance for Doubtful Accounts Dr 6,000 Accounts Receivable Cr 6,000 (b) The net realizable value: Is the gross Accounts Receivable less than the Allowance for doubtful accounts.

  • Elburn Company - Adjusting Entries

    entries for Elburn Company's accounting transactions.

View More Related Solutions