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Question 10 View Policies Current Attempt in Progress The following are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Pronghorn Company's unadjusted trial balance at December 31, 2020, included the following accounts. Credit Accounts receivable Allowance for doubtful accounts Net sales Debit $49,900 7.790 $1,279,500 Pronghorn Company estimates its bad debt expense to be 8% of gross accounts receivable. Determine its bad debt expense for 2020. Bad debt expense for 2020 $ 2. An analysis and aging of Stellar Corp. accounts receivable at December 31, 2020, disclosed the following. Amounts estimated to be uncollectible Accounts receivable Allowance for doubtful accounts (per books) $182,680 1,791,100 126,160 What is the net amount expected to be collected of Stellar's receivables at December 31, 2020? Net realizable value $ 3. Pearl Co. provides for doubtful accounts based on 3% of gross accounts receivable. The following data are available for 2020. Credit sales during 2020 Bad debt expense Allowance for doubtful accounts 1/1/20 Collection of accounts written off in prior years (customer credit was reestablished) Customer accounts written off as uncollectible during 2020 $2,194,000 59,700 18,020 7,780 31,000 What is the balance in Allowance for Doubtful Accounts at December 31, 2020? Allowance for doubtful accounts 12/31/20 $ 4. At the end of its first year of operations, December 31, 2020, Martinez Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts $910,400 Customer accounts written off as uncollectible during 2020 24,860 Bad debt expense for 2020 88,760 What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts? Accounts receivable, before deducting allowance for doubtful accounts $ 5. The following accounts were taken from Sandhill Incs trial balance at December 31, 2020. Credit $687,000 Debit Net credit sales Allowance for doubtful accounts $15,060 Accounts receivable 309,200 If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2020. Bad debt expense, as adjusted $ e Textbook and Media Save for Later

Answer 1

1. Bad debt expense for 2020 = (49,900x8%)+7,790 = 11,782 2. Net realizable value = 1,791,100-182,680 = 1,608,420 3. Allowance for doubtful accounts 12/31/20 = 18,020+59,700+7,780-31,000 = 54,500 4. AR, before deducting allowance = 910,400+88,760-24,860 =974,300 5. Bad debt expense, as adjusted = (309,200x3%)+15,060 = 24,336