ORIE_350_Homework__5_answers - ORIE 350 Homework#5 Due 1...

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ORIE 350 Homework #5 Due February 27, 2007 1. Avioni Fashions uses the aging method for estimating uncollectible accounts. On February 1, 2005, Accounts Receivable had a balance of $446,341 (debit), and Allowance for Uncollectible Accounts had a balance of $43,000 (credit). During the year, the company had sales on account of $3,724,000, returns and allowances of $63,000, accounts written off of $44,300, and collections from customers of $3,214,000. As past of the year end adjusting procedures on Janauary 31, 2006, the company performs an aging of its accounts and finds: Total $849,041 % Uncollectible Not Due $478,423 2% 1 – 30 $158,278 4 31 – 60 $112,716 20 61 – 90 $58,222 30 91+ days $41,402 50 a. find the end-of-year balances in Accounts Receivable and Allowance for Uncollectible Accounts prior to adjustments. b. Compute the necessary end of year adjustments needed to Accounts Receivable. There are no end of year adjustements made to Accounts Receivable. c. Provide the journal entry needed to record Bad Debt Expense for the fiscal year ended January 31, 2006 . January 31, 2006 Bad Debt Expense 77,910 Allowance for Uncollectible Accounts 77,910
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2. Resin Binz Inc. is a distributor of industrial polyethylene containers. Due to recent declines in plastic resin costs, the cost of these containers has been reduced.
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  • Spring '08
  • Generally Accepted Accounting Principles, 1944, Uncollectible Accounts

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