Purchase Solution

P9-5A Calculate the total estimated bad debts based on the above information.

Not what you're looking for?

Ask Custom Question

The attached represents selected information taken from a company's aging schedule
to estimate uncollectible accounts receivable at year end.

Number of Days Outstanding
Total 0-30 31-60 61-90 91-120 Over 120
Accounts receivable $260,000 $100,000 $60,000 $50,000 $30,000 $20,000
% uncollectible 1% 5% 7.5% 10% 12%
Estimated bad debts

(a) Calculate the total estimated bad debts based on the above information.

(b) Prepare the year-end adjusting journal entry to record the bad debts using the allowance method and the aged uncollectible accounts receivable determined in (a). Assume the opening balance in the Allowance for Doubtful Accounts account is a $10,000 credit.

(c) Of the above accounts, $2,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible accounts.

(d) The company subsequently collects $1,000 on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.

(e) Explain how establishing an allowance account satisfies the matching principle.

Attachments
Purchase this Solution

Solution Summary

Computations provided for you.

Purchase this Solution


Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Lean your Process

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

Change and Resistance within Organizations

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

Motivation

This tests some key elements of major motivation theories.