Question

Cornerstone Exercise 5-27 (Algorithmic) Aging Method On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable $1,286,400 48,000 Allowance for Doubtful Accounts (a credit balance) During 2019, Hungryman had $18,800,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off $60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible. Required: 1. Calculate Hungryman's preadjustment balance in accounts receivable on Decerber 31, 2019, 2. Calculate Hungryman's preadjustment balance in allowance for doubtful accounts on December 31, 2019 66,000 Feedback and make the nec Check My Wo 1 & 2. Using T-accounts, start with the balance at the beginning of the year and make the necessary debits and/or credits for the transactic the year. Previous Check My Work

Answer 1

Solution a:

Preadjustment balance in Accounts receivable = 1286400 + 18800000 - 17945000 - 60000 = $2,081,400

Solution b:

Preadjustment balance in Allowance for doubtful Accounts = 48000 - 60000 = ($12,000) [Debit balance]