Damon Company performs an aging analysis to determine the amount of its bad debts expense to...
Damon Company performs an aging analysis to determine the amount of its bad debts expense to record at the end of each year. At the end of the current year, Damon's aging schedule appeared as follows:
|
Amount |
Fraction expected to be uncollectible |
|
|
Current receivables |
$12,000 |
1% |
|
Past-due receivables |
||
|
1-30 days |
2,650 |
2% |
|
31-60 days |
4,050 |
6% |
|
61-90 days |
980 |
25% |
|
91+ days |
630 |
40% |
The balance in Damon's Allowance for Doubtful Accounts was $260
negative (i.e.: the bad debt expense in the prior period had been
under estimated).
Using the information above, what is the amount of Damon’s bad debt expense for the year?
| a. |
$ 815 |
|
| b. |
$2,443 |
|
| c. |
$ 913 |
|
| d. |
$1,173 |
Homework Answers
Ending balance in allowance for doubtful accounts = ($12,000 * 1%) + ($2,650 * 2%) + ($4,050 * 6%) + ($980 * 25%) + ($630 * 40%)
= $120 + $53 + $243 + $245 + $252
= $913
Bad debt expense for the year = Ending balance in allowance for doubtful accounts + Negative balance in the allowance for doubtful accounts
= $913 + $260
= $1,173
The answer is Option d.
Add Answer to:
Damon Company performs an aging analysis to determine the amount
of its bad debts expense to...
Damon Company performs an aging analysis to determine the amount of its bad debts expense to...
Damon Company performs an aging analysis to determine the amount of its bad debts expense to record at the end of each year. At the end of the current year, Damon's aging schedule appeared as follows: Amount Fraction expected to be uncollectible Current receivables $12,000 1% Past-due receivables 1-30 days 2,650 2% 31-60 days 4,050 6% 61-90 days 980 25% 91+ days 630 40% The balance in Damon's Allowance for Doubtful Accounts was $260 negative (i.e.: the bad debt expense in...
A company uses the aging of accounts receivable method to estimate its bad debts expense. On...
A company uses the aging of accounts receivable method to
estimate its bad debts expense. On December 31 of the current year
an aging analysis of accounts receivable revealed the following
4. A company uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year an aging analysis of accounts receivable revealed the following Account Age Current (not yet due) 1-30 days past due 30 60 days past due 61-90 days...
E6-13 (Algo) Computing Bad Debt Expense Using Aging Analysis LO6-2 Lin's Dairy uses the aging approach...
E6-13 (Algo) Computing Bad Debt Expense Using Aging Analysis LO6-2 Lin's 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, $16,400, (2) up to 120 days past due, $6,600; 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...
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...
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...
Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each...
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 to 30 days old, $12,000; (2) 31 to 90 days old, $5,000; and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average loss rate on the amount of the receivable due to uncollectibility is (1) 3 percent, (2) 15 percent, and...
Exercise 5-68 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging s...
Exercise 5-68 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Accounts Proportion Allowance Receivable Age Amount Expected Required to Default Current $310,500 0.005 $1,553 1-30 days past due 47,500 0.01 475 31-45 days past due 25,000 0.13 3,250 46-90 days past due 2,560 91-135 days past due 6,100 1,525 Over 135 days past due 4,200 0.60 2,520 $11,883 12,800 0.20 The balance in Glencoe's allowance for...
Exercise 5-49 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging...
Exercise 5-49 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Accounts Receivable Age Current 1-30 days past due 31-45 days past due 46-90 days past due 91-135 days past due Over 135 days past due Amount $310,500 47,500 25,000 12,800 6,100 4,200 Proportion Expected 10 Default 0.005 0.01 0.13 0.20 0.25 0.60 Allowance Required $ 1,553 475 3,250 2,560 1,525 2,520 $11.883 The balance in Glencoe's...
Aging Receivables and Bad Debt Expense Perkinson Corporation sells paper products to a large number of...
Aging Receivables and Bad Debt Expense Perkinson Corporation sells paper products to a large number of retailers. Perkinson's accountant has prepared the following aging schedule for its accounts receivable at the end of the year. Proportion Expected to Default Accounts Receivable Category Within discount period 1-30 days pas discount period 31-60 days past discount period Over 60 days past discount period 0.004 Amount $384,500 187,600 41,800 21,400 0.015 0.085 0.200 Before adjusting entries are entered, the balance in the allowance...
A company uses the aging of accounts receivable method to
estimate its bad debts expense. On December 31 of the current year
an aging analysis of accounts receivable revealed the following
4. A company uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year an aging analysis of accounts receivable revealed the following Account Age Current (not yet due) 1-30 days past due 30 60 days past due 61-90 days...
E6-13 (Algo) Computing Bad Debt Expense Using Aging Analysis LO6-2 Lin's 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, $16,400, (2) up to 120 days past due, $6,600; 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...
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. 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...
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 to 30 days old, $12,000; (2) 31 to 90 days old, $5,000; and (3) more than 90 days old, $3,000. Experience has shown that for each age group, the average loss rate on the amount of the receivable due to uncollectibility is (1) 3 percent, (2) 15 percent, and...
Exercise 5-68 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Accounts Proportion Allowance Receivable Age Amount Expected Required to Default Current $310,500 0.005 $1,553 1-30 days past due 47,500 0.01 475 31-45 days past due 25,000 0.13 3,250 46-90 days past due 2,560 91-135 days past due 6,100 1,525 Over 135 days past due 4,200 0.60 2,520 $11,883 12,800 0.20 The balance in Glencoe's allowance for...
Exercise 5-49 (Algorithmic) Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. Accounts Receivable Age Current 1-30 days past due 31-45 days past due 46-90 days past due 91-135 days past due Over 135 days past due Amount $310,500 47,500 25,000 12,800 6,100 4,200 Proportion Expected 10 Default 0.005 0.01 0.13 0.20 0.25 0.60 Allowance Required $ 1,553 475 3,250 2,560 1,525 2,520 $11.883 The balance in Glencoe's...
Aging Receivables and Bad Debt Expense Perkinson Corporation sells paper products to a large number of retailers. Perkinson's accountant has prepared the following aging schedule for its accounts receivable at the end of the year. Proportion Expected to Default Accounts Receivable Category Within discount period 1-30 days pas discount period 31-60 days past discount period Over 60 days past discount period 0.004 Amount $384,500 187,600 41,800 21,400 0.015 0.085 0.200 Before adjusting entries are entered, the balance in the allowance...
Most questions answered within 3 hours.
-
Assume one of your finals has 50 questions on it, and
lucky for you, it's all...
asked 1 hour ago -
Rice Products in Bangladesh
Business behavior is derived in large part from the basic cultural
environment...
asked 2 hours ago -
The following base sequence is found for a mRNA fragment from
wild-type E. coli: 5'- UAUCAGUAGAUAAUGUAACC-3'...
asked 2 hours ago -
For this exercise, round all regression parameters to three
decimal places.
One of the two tables...
asked 3 hours ago -
What is the 5% level of significance for mean = 3.60, standard
deviation = 0.94, and...
asked 3 hours ago -
Prior to beginning work on this discussion, please read the
article by Hayley Peterson, 15 Companies...
asked 3 hours ago -
Which pair of aqueous solutions, when mixed, will form a
precipitate?
A) NaNO3 and AgC2H3O2
B)...
asked 4 hours ago -
1-Write an algorithm to get two numbers from the user (as
inputs) and calculate the sum...
asked 7 hours ago -
Define white-collar crime. What is the difference between
offender and offense-based definitions of white-collar crime? What...
asked 8 hours ago -
Consider a reaction which is 1st order with respect to A and 1st
order with respect...
asked 8 hours ago -
c++
The length of the hypotenuse of a right-angled triangle is the
square root of the...
asked 8 hours ago -
When a metal rod is heated, not only its resistance but also its
length and cross‐sectional...
asked 8 hours ago