223_Hwk_6_Solutions

223_Hwk_6_Solutions - HA 223 Fall 2006 Homework 6 Solution...

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HA 223 – Fall 2006 – Homework 6 – Solution E6–14. Req. 1 December 31, 2008-Adjusting entry: Bad debt expense (+E, –SE) ......................................... 14,100 Allowance for doubtful accounts (+XA, –A) ........ 14,100 To adjust for estimated bad debt expense for 2008 computed as follows: Aged accounts receivable Estimated percentage uncollectible Estimated amount uncollectible Not yet due $300,000 x .5% = $1,500 Up to 120 days past due 50,000 x 10% = 5,000 Over 120 days past due 26,000 x 30% = 7,800 Estimated balance in Allowance for Doubtful Accounts $14,300 Current balance in Allowance for Doubtful Accounts 200 Bad Debt Expense for the year $14,100 Req. 2 Balance sheet: Accounts receivable ($300,000 + $50,000 + $26,000) $376,000 Less allowance for doubtful accounts ...................... 14,300 Accounts receivable, net of allowance for doubtful accounts .......................................... $361,700 P6–5. Req. 1 Aging Analysis of Accounts Receivable Customer Total Receivables (a) Not Yet Due (b) Up to One Year Past Due (c) More Than One Year Past Due B. Brown………….. $ 5,000 $5,000 D. Donalds……….. 4,000 $ 4,000 N. Napier…………. 7,000 $ 7,000 S. Strothers……… 19,000 3,000 16,000 T. Thomas………... 7,000 7,000 Totals…………… $42,000 $17,000 $20,000 $5,000 Percent…………. 100% 40% 48% 12%
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Req. 2
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