Which of the following is true about the presentation of receivables? Bad debts expense must be...
Which of the following is true about the presentation of
receivables?
| Bad debts expense must be reported under non-operating expenses in the income statement. |
| Companies must report gross accounts receivable on the statement of financial position. |
| The allowance for doubtful accounts must be reported in the liabilities section of the statement of financial position. |
| Companies must report the carrying amount of accounts receivable on the statement of financial position. |
Homework Answers
The correct answer is
Companies must report the carrying amount of account receivable on the statement of financial position.
Explanation
Account receivable are the amount receivable from customer. When companies considers that certain portion of account receivable would not be recoverable, they create allowance for doubtful debts. The company shows account receivable net of allowance for doubtful debt in the statement of financial position. Thus it means account receivable are shown on carrying value in the statement of financial position.
Add Answer to:
Which of the following is true about the presentation of
receivables?
Bad debts expense must be...
Sheridan Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable...
Sheridan Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $150000 and credit sales are $1510000. Management estimates that 4% of accounts receivable will be uncollectible. What adjusting entry will Sheridan Company make if the Allowance for Doubtful Accounts has a credit balance of $1500 before adjustment? a. Bad Debt Expense 15100 Allowance for Doubtful Accounts 15100 b. Bad Debt Expense 4500 Accounts Receivable 4500 c. Bad Debt Expense 15100 Accounts Receivable...
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable...
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $3400 before adjustment? Bad Debt Expense 5100 Allowance for Doubtful Accounts 5100 Bad Debt Expense 5100 Accounts Receivable 5100 34200 Bad Debt Expense 34200 Accounts Receivable Bad Debt...
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the...
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? 15,7501 Bad Debts Expense Allowance for Doubtful Accounts...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2019, Sunil Company had a...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2019, Sunil Company had a balance of $375,000 in its accounts receivable and an unused balance of $4,200 in its allowance for uncollectible accounts. The company then aged its accounts as follows: Current $304,000 0-60 days past due 44,000 61-180 days past due 18,000 Over 180 days past due 9.000 Total accounts receivable $375,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 0-60...
Q1- Hershey Co. uses the percentage of receivables method for recording bad debts expense. For the...
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Reformulating Allowance for Doubtful Accounts and Bad
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Merck & Company reported the following from its 2016
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$ millions Accounts receivable, net Allowance for doubtful accounts 2013 2014 2015 2016 $7,184 $6,626 $6,484 $7,018 146 153 165 95 a. Compute accounts receivable gross for each year. $ millions 2013 2014 2015 Accounts receivable, gross $ 2016 b. Determine the percentage of allowance to gross account receivables for each year. Round answers to two decimal places (ex: 0.02345...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on...
Bad Debt Practice Exercises 26. The percentage of receivables method for estimating uncollectible accounts focuses on a net realizable value b. the relationship between accounts receivable and bad debts expense c. income statement relationships d. the relationship between sales and accounts receivable 27. Holman Company uses the percentage of credit sales method. Cash sales are $1,000,000 and credit sales are $4,000,000. Management estimates that 1% of sales will be bad. What adjusting entry will Homan Company make to record the...
Under the allowance method for uncollectible accounts, A) Bad Debts Expense is debited when an account...
Under the allowance method for uncollectible accounts, A) Bad Debts Expense is debited when an account is deemed uncollectible and must be written off. B) the carrying value of receivables is the same both before and after an account has been written off. C) the carrying amount of receivables is the same both before and after an account that had previously been written off is recovered. D) the recovery of an account receivable previously written off results in a credit...
A company ages its accounts receivables to determine its end of period adjustment for bad debts....
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $29,250 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $825. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? Multiple Choice Bad Debts Expense 29,250 29,250 Bad...
A company ages its accounts receivables to determine its end of period adjustment for bad debts....
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year end adjustments, the Allowance for Doubtful Accounts had a credit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? Bad Debts Expense 15,375 Allowance for Doubtful...
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $3400 before adjustment? Bad Debt Expense 5100 Allowance for Doubtful Accounts 5100 Bad Debt Expense 5100 Accounts Receivable 5100 34200 Bad Debt Expense 34200 Accounts Receivable Bad Debt...
A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? 15,7501 Bad Debts Expense Allowance for Doubtful Accounts...
Estimating Bad Debts Expense and Reporting of Receivables At December 31, 2019, Sunil Company had a balance of $375,000 in its accounts receivable and an unused balance of $4,200 in its allowance for uncollectible accounts. The company then aged its accounts as follows: Current $304,000 0-60 days past due 44,000 61-180 days past due 18,000 Over 180 days past due 9.000 Total accounts receivable $375,000 The company has experienced losses as follows: 1% of current balances, 5% of balances 0-60...
Q1- Hershey Co. uses the percentage of receivables method for recording bad debts expense. For the year, Hershey estimates that 4% of accounts receivable will become uncollectible. If the trial balance shows accounts receivable with a debit balance of $80,000 and allowance for doubtful accounts (ADA) with a debit balance of $600. What would the adjusting entry to the account - Allowance for doubtful accounts be? (Ignore the bad debt expense side of the entry Q2: Blue Co. uses the...
Reformulating Allowance for Doubtful Accounts and Bad
Debt Expense
Merck & Company reported the following from its 2016
financial statements.
$ millions Accounts receivable, net Allowance for doubtful accounts 2013 2014 2015 2016 $7,184 $6,626 $6,484 $7,018 146 153 165 95 a. Compute accounts receivable gross for each year. $ millions 2013 2014 2015 Accounts receivable, gross $ 2016 b. Determine the percentage of allowance to gross account receivables for each year. Round answers to two decimal places (ex: 0.02345...
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A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $29,250 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $825. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense? Multiple Choice Bad Debts Expense 29,250 29,250 Bad...
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