HW5 Solutions - Accounts receivable($295,000 $55,000...

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E6–2. Sales revenue ($3,000 + $9,000 +$4,000) ................................ $16,000 Less: Sales discounts ($9,000 collected from S x 3%) ............. 270 Less: Credit card discounts ($3,000 from R x 2%) ................... 60 Net sales ................................................................................... $15,670 E6–6. (a) Bad debt expense (+E, –SE) ($1,300,000 x 0.01) ..... 13,000 Allowance for doubtful accounts (+XA, –A) ....... 13,000 To record estimated bad debt expense. (b) Allowance for doubtful accounts (–XA, +A) .............. 4,000 Accounts receivable (–A) .................................. 4,000 E6–12. Req. 1 December 31, 2015-Adjusting entry: Bad debt expense (+E, –SE) ....................................... 18,725 Allowance for doubtful accounts (+XA, –A) ....... 18,725 To adjust for estimated bad debt expense for 2015 computed as follows: Aged accounts receivable Estimated percentage uncollectible Estimated amount uncollectible Not yet due $295,000 x 2.5% = $7,375 Up to 120 days past due 55,000 x 11% = 6,050 Over 120 days past due 18,000 x 30% = 5,400 Estimated balance in Allowance for Doubtful Accounts 18,825 Current balance in Allowance for Doubtful Accounts 100 Bad Debt Expense for the year $18,725
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Req. 2 Balance sheet:
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Unformatted text preview: Accounts receivable ($295,000 + $55,000 + $18,000) $368,000 Less allowance for doubtful accounts . .................... 18,825 Accounts receivable, net of allowance for doubtful accounts . ........................................ $349,175 E6–14. Req. 1 Allowance for Doubtful Accounts 117 Beg. balance Write-offs 52 88 Bad debt exp. 153 End. balance Beg. Balance + Bad debt exp. – Write-offs = End. Balance Beg. Balance + Bad debt exp. – End. Balance = Write-offs 117 + 88 – 153 = 52 Bad debt expense increases (is credited to) the allowance. Since we are given the beginning and ending balances in the allowance, we can solve for write-offs, which decrease (are debited to) the allowance. Req. 2 Accounts Receivable (Gross) Beg. balance* 11,455 52 Write-offs Net sales 60,420 58,081 Cash collections End. balance ** 13,742 * 11,338 + 117 ** 13,589 + 153 Beg. balance + Net sales – Write-offs – Cash collections = End. Balance Beg. balance + Net sales – Write-offs – End. Balance = Cash collections 11,455 + 60,420 – 52 – 13,742 = 58,081 Accounts receivable gross is increased by recording credit sales and decreased by recording cash collections and write-offs of bad debts. Thus, we can solve for cash collections as the missing value....
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