AR exercise - Session 19 ACCT 410 Group Exercise Q1_Bad...

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Session 19 ACCT 410 Group Exercise Q1) ______Bad debt expense should be recognized a. in the period in which the related sale took place. b. in the period in which management determines that the customer is unable to pay. c. when the uncollectible account is written off. d. when the debt is turned over to a collection agency. Q2a)______The following information is provided for the Dawdy Company at December 31, 2001, before any adjusting entries were made. Net Credit Sales $900,000 Accounts Receivable Balance 120,000 Allowance for Bad Debts (credit balance) 3,000 The following aging of accounts receivable was prepared at December 31, 2001. Age Total Percentage Estimated Uncollectible Current $80,000 10% 31-60 days 20,000 15% 61-90 days 15,000 30% Over 90 days 5,000 40% The desired balance for the Allowance for Bad Debts would be: a. $6,500 b. $9,500 c. $17,500 d. $20,500 Q2b) In the previous example, what is the adjusting entry to record bad debt expenses? Q3) The entry to close the Allowance for Uncollectible Accounts at the end of the period would include a a. debit to Income Summary.
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