a. Entry under the write-off method | ||
Bad Debt Expense | $103,100 | |
Accounts receivable - Kim Abel | $24,300 | |
Accounts receivable - Lee Drake | $31,195 | |
Accounts receivable - Jenny Green | $29,715 | |
Accounts receivable - Mike Lamb | $17,890 | |
b. Write-off entry and Year-end adjustment entry under the Allowance method | ||
Allowance for Doubtful Accounts | $103,100 | |
Accounts receivable - Kim Abel | $24,300 | |
Accounts receivable - Lee Drake | $31,195 | |
Accounts receivable - Jenny Green | $29,715 | |
Accounts receivable - Mike Lamb | $17,890 | |
Bad Debt Expense [Refer working note 1] | $121,300 | |
Allowance for Doubtful Accounts | $121,300 | |
c. How much higher (lower) would Seaforth International’s 2016 net income have been under the allowance method than under the direct write-off method? | ||
Lower |
$18,200 [Refer working note 2] |
|
Reason - Higher expense is recorded under the allowance method |
.
.
Working note 1 - Computation of the amount of bad debt expense to be recorded at the year-end | ||||
Aging Class (Number of Days Past Due) |
Receivables Balance on December 31 (a) |
Estimated Percent of Uncollectible Accounts (b) |
Amount Uncollectible (a x b) |
|
0–30 days | $735,000 | 1% | $7,350 | |
31–60 days | $290,000 | 2% | $5,800 | |
61–90 days | $111,000 | 15% | $16,650 | |
91–120 days | $70,000 | 30% | $21,000 | |
More than 120 days | $94,000 | 60% | $56,400 | |
Total amount uncollectible = After Adjustment balance in Allowance for Doubtful account (a) | $107,200 | |||
Before Adjustment balance in Allowance for Doubtful account [Beginning balance - Write-off amount = $89,000 - $103,100] (b) | $14,100 | Debit balance | ||
Amount of bad debt expense to be recorded at the year-end (a + b) | $121,300 |
.
.
Working note 2 | |
Expense recorded under Allowance method (a) | $121,300 |
Expense recorded under Direct write-off method (b) | $103,100 |
Excess expense recorded under allowance method (a - b) | $18,200 |
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31:...
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: The company prepared the following aging schedule for its accounts receivable on December 31: Journalize the write-offs under the direct write-off method. Journalize the write-offs and the year-end adjusting entry under the allowance method, assuming that the allowance account had a beginning balance of $89,000 and the company uses the analysis of receivables method. How much higher (lower) would Seaforth International’s net income have...
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,300 Lee Drake 30,600 Jenny Green 29,900 Mike Lamb 17,900 Total $102,700 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0–30 days $730,000 1% 31–60 days 290,000 2 61–90 days 114,000 15 91–120 days 70,000 30 More...
Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,500 Lee Drake 31,000 Jenny Green 29,700 Mike Lamb 17,900 Total $103,100 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0–30 days $740,000 1% 31–60 days 300,000 2 61–90 days 110,000 15 91–120 days 70,000 30 More...
Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,300 Lee Drake 31,195 Jenny Green 29,715 Mike Lamb 17,890 Total $103,100 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days $735,000 1 %...
Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Kim Abel Amount $24,200 Lee Drake 32,850 Jenny Green 29,900 Mike Lamb Total 17,900 $104,850 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days 31-60 days 61-90...
Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $21,550 Lee Drake 33,925 Jenny Green 27,565 Mike Lamb 19,460 Total $102,500 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days $715,000 1% 31-60...
would like to know the correct answers for the boxes with a red x by them. Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,200 Lee Drake 32,850 Jenny Green 29,900 Mike Lamb 17,900 Total $104,850 ompany prepared the following aging schedule for its accounts receivable on December 31: The Receivables Aging Class (Number Balance Estimated...
need help with B and C Calculator Entries for Bad Debt Expense Under the Direct Write-off and Allowance Methods Seaforth International wrote of the following accounts receivable as uncollectible for the year ending December 31 Customer Kim Abel $24,300 31,195 29,715 Lee Drake Jenny Green Mke Lamb Total 17.890 $103, 100 The company prepared the following aging schedule for its accounts receivable on December 31 Aging Class (Number of Days Past Due) Receivables Balance on December Estimated Parcent of Uncollectible...
Test 2 Calculator Instructions Chart of Accounts Journal Final Question Instructions Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel S24,400 Lee Drake 30.150 Jenny Green 29,800 Mike Lamb 17,800 Total $102,150 The company prepared the following aging schedule for its accounts receivable on December 31: Aging Class (Number of Days Past Due) Receivables Balance on December 31 Estimated Percent of Uncollectible Accounts 0-30 days $735,000 1% 31 60...
all together ; entries for bad debt expense and under the direct write off and allowance methods UUTIW ALUWIPNC ACCT I BL. Cengage CengageNOWV2 Online teaching and Ch 9-3 Exercises & Problems Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $21,550 33,925 Lee Drake Jenny Green Mike Lamb 27,565 19,460 $102,500 Total The company prepared the...