Purchase Solution

Calculate Uncollectible Accounts Expense and Allowance

Not what you're looking for?

Ask Custom Question

The general ledger account for Accounts Receivable shows a debit balance of $40,000. The Allowance for Uncollectible Accounts has a credit balance of $2,000. Net sales for the year were $250,000. In the past, 3 percent of net sales have proved uncollectible. An aging of accounts receivable results in an estimate of $9,000 of uncollectible accounts receivable.

Calculate:
(1) Uncollectible Accounts Expense
(2) the ending balance of the Allowance for Uncollectible Accounts using (a) the Percentage of Net Sales method and (b) the Accounts Receivable Aging method.

Purchase this Solution
Solution Summary

This solution explains how to compute the amount that should be debited to the Uncollectible Accounts Expense. Two methods are used: the Percentage of Net Sales Method and Accounts Receivable Aging Method.

Solution Preview

Using the Percentage of Net Sales method

(1) Uncollectible Accounts Expense: $250,000*3%= $7,500
(2) The ending balance of the Allowance for Uncollectible Accounts : Opening balance = $2,000 (cr) + $7,500 = $9,500 ...

Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Motivation

This tests some key elements of major motivation theories.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

View More Free Quizzes
Related BrainMass Solutions

  • Accounting: provision for uncollectible accounts receivable

    uncollectible accounts per aging, 12/31/04 74,000 After year-end adjustment, the uncollectible accounts expense for 2005 should be a. $44,000.

  • Bad Debt and Uncollectible Accounts

    The solution calculates bad debt and uncollectible accounts.

  • Computing and Recording Bad Debt Expense

    The journal entry is Bad Debt Expense Dr 58,500 Allowance for Bad Debts Cr 58,500 The solution explains how to calculate the record bad debt expense.

  • bad debt expense and year end balance for allowance

    391839 bad debt expense and year end balance for allowance The following information relates to a company's accounts receivable: accounts receivable balance at the beginning of the year, $319,000; allowance for uncollectible accounts at the beginning

  • Adjusting entry for bad debts

    allowance for uncollectible accounts is $2,500.

  • Determining estimated uncollectible and adjusting entry

    The adjusting entry is Mar 31 Bad Debt Expense Dr 7,030 Allowance for Doubtful Accounts Cr 7,030 The solution explains how to calculate the uncollectible amount using an ageing schedule and the adjusting journal entry

  • Grayson Group

    269438 Calculate allowance for doubtful accounts; prepare journal entry Please find attached the XCEL file containing the questions.

  • Working with Receivables

    Uncollectible-Account Expense 2,400 Allowance for Uncollectible Accounts 2,400 For write-offs, we will have to debit Allowance for Uncollectible Accounts and credit Accounts Receivable.

  • LMN Co.

    debit Allowance for Doubtful Accounts; credit Accounts Receivable debit Sales Returns and Allowance, credit Accounts Receivable debit Uncollectible Accounts Expense; credit Allowance for Doubtful Accounts debit Accounts Receivable

View More Related Solutions