True or false 11. The income statement approach in estimating bad receivable uses percent of netsales...
True or false 11. The income statement approach in estimating bad receivable uses percent of netsales without considering the current balance in the AFDA
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True or false 11. The income statement approach in estimating
bad receivable uses percent of netsales...
A company uses the income statement approach to determine the required balance in the AFDA account....
A company uses the income statement approach to determine the required balance in the AFDA account. Sales are $10 million. Management believes that an allowance of 0.2% is required. At present, the balance of the allowance account is zero. The journal entry to set up the required allowance includes: Select one: a. A debit to AFDA of $20,000 b. A credit to Bad Debt expense of $20,000 c. A credit to AFDA of $20,000 d. A credit to AFDA of...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $283,000; (2) up to 120 days past due, $57,000; and (3) more than 120 days past due, $23,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3.5 percent. (2) 11...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $283,000; (2) up to 120 days past due, $57,000; and (3) more than 120 days past due, $23,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3.5 percent. (2) 11...
The percent of sales method for estimating bad debts assumes that a given percent of a...
The percent of sales method for estimating bad debts assumes that a given percent of a company's credit sales for the period are uncollectible. TRUE/FALSE
Blue Water Equipment Company uses the aging approach to estimate bad debt expense at the end...
Blue Water Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. The balance of each account receivable is aged on the basis of the three time periods as follows: Not yet due, $192,000 Up to one year past due, $12,000 More than one year past due, $3,200 Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectability is...
Using the income statement approach, in the adjustment entry, what is the debit to the bad...
Using the income statement approach, in the adjustment entry, what is the debit to the bad debt expense account given the following amounts? Bad debt at a percentage of sales 2% Bad debt as a percentage of A/R 5% Sales 800,000 A/R 125,000 Balance of bad debt expense before adjustment (debit balance) 9,840 HINT Bad debt expense adjustment is done at the end of the year (or quarter or month) depending on when companies pull together financial statements. The Income...
Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of...
Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $19,500; (2) up to 120 days past due, $5,500; and (3) more than 120 days past due, $3,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2)...
Estimating the Bad Debts Expense Winstead&Company has accounts receivable of $330,000 and a debit balance of...
Estimating the Bad Debts Expense Winstead&Company has accounts receivable of $330,000 and a debit balance of $2,750 in the Allowance for Doubtful Accounts. Two thirds of the accounts receivable are current and one third is past due, The firm estimates that two percent of the current accounts and five percent of the past due accounts will prove to be uncollectible. The adjusting entry to provide for the bad debts expense under the aging method should be for what amount? 09,900...
Modern Office has $3,000,000 of credit sales for the year and $50,000 of outstanding accounts receivable...
Modern Office has $3,000,000 of credit sales for the year and $50,000 of outstanding accounts receivable and $1,000 balance of Allowance for Doubtful Account(AFDA) on December 31. Modern Office estimates that either 0.1% of credit sales or 8% of outstanding receivables will not be collectible and wants to set up an Allowance for Doubtful Account(AFDA). How much is the bad debt expense for the year under the Percentage of Sales (Income Statement) Approach? How much is the bad debt expense for...
Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on...
Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three time periods as follows: (1) 1–30 days old, $12,800; (2) 31–90 days old, $5,800; and (3) more than 90 days old, $3,800. For each age group, the average loss rate on the amount of the receivable due to uncollectibility is estimated to be (1) 4 percent, (2) 12 percent, and (3) 15 percent, respectively. At...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $283,000; (2) up to 120 days past due, $57,000; and (3) more than 120 days past due, $23,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3.5 percent. (2) 11...
Chou Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $283,000; (2) up to 120 days past due, $57,000; and (3) more than 120 days past due, $23,000. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3.5 percent. (2) 11...
Brown Cow Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $19,500; (2) up to 120 days past due, $5,500; and (3) more than 120 days past due, $3,500. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2)...
Estimating the Bad Debts Expense Winstead&Company has accounts receivable of $330,000 and a debit balance of $2,750 in the Allowance for Doubtful Accounts. Two thirds of the accounts receivable are current and one third is past due, The firm estimates that two percent of the current accounts and five percent of the past due accounts will prove to be uncollectible. The adjusting entry to provide for the bad debts expense under the aging method should be for what amount? 09,900...
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