Homework Answers
Q3.
There are two scenarios:
(a)Suppose the aging schedule has 20% target balance out of the total account receivable $200,000. On that time the unadjusted credit balance in the allowance account is $30,000. Therefore, the bad debt expense would be as below:
Bad debt expense = Target balance – Unadjusted credit balance in the allowance account
= ($200,000 × 20%) – 30,000
= 40,000 – 30,000
= $10,000.
It should make a journal of bad debt expense as debit and allowance account as credit of $10,000.
(b) Suppose the aging schedule has 20% target balance out of the total account receivable $200,000. On that time the unadjusted debit balance in the allowance account is $30,000. Therefore, the bad debt expense would be as below:
Bad debt expense = Target balance + Unadjusted debit balance in the allowance account
= ($200,000 × 20%) + 30,000
= 40,000 + 30,000
= $70,000.
It should make a journal of bad debt expense as debit and allowance account as credit of $70,000.
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19) 20) Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance...
19)
20)
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Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each...
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Assume that before recording the bad debt expense, the Allowanc account has a credit (right-side) balance of $400. If the company use method to record the bad debt expense, and the aging schedule expense, the Allowance for Doubtful Accounts U. If the company uses the aging of receivables ceivable will not be collected, then the journal entry to record the bad une aging schedule estimates that $4,000 of the would be 3600 E. Bad Debt Expense Allowance for Doubtful Accounts...
19. Tanning Company analyzes its receivables to estimate bad debt expense The accounts receivable balance is $300 000 and credit sales are $1,000,000. An Aging of accounts receivable shows that approximately 10 of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,000 before adjustment? A Bad Debt Expense 26,000 Allowance for Doubtful 26,000 Accounts B. Bad Debt Expense 30,000 Allowance for Doubtful Accounts C....
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19)
20)
Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000 Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500 Bad Debt...
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...
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: () 1-30 days old, $11,900: (2) 31-90 days old, $4.900; and (3) more than 90 days old, $2.900. 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...
1. Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? a. Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22.000 b. Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000 c....
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