ch06 - CHAPTER 6 THE CURRENT ASSET CLASSIFICATION, CASH,...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 6 THE CURRENT ASSET CLASSIFICATION, CASH, AND ACCOUNTS RECEIVABLE E6–5 Allowance for Uncollectibles 2008 Write-Offs 10,000 12/31/08 Bad Debt Expense 30,000 1 2009 Write-Offs 22,000 12/31/09 Bad Debt Expense 28,000 2 Ending Balance 26,000 ___________ 1 $1,500,000 × .02 = $30,000 2 $1,400,000 × .02 = $28,000 Overall, the bad debts estimates are sufficient to cover the write-offs. E6–6 a. Ending Allowance Balance = Beginning Allowance Balance + Bad Debt Charge – Write-Offs + Recoveries $200,000 = Beginning Allowance Balance + $162,500 – $195,000 + $45,000 Beginning Allowance Balance = $187,500 _____________ * $162,500 = Sales of $3,250,000 × Estimated uncollectible percentage of 5% b. [ Assume the $4,200,000 cash collections includes the $45,000 recovery ] Ending Accounts Receivable = Beginning Accounts Receivable + Credit Sales during the year – Cash Collected on account receivables during the year – Accounts Receivables written off + Written-Off Accounts Receivables Recovered. $7,500,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

ch06 - CHAPTER 6 THE CURRENT ASSET CLASSIFICATION, CASH,...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online