HomeworkFall2009Solutions 20,21,22

HomeworkFall2009Solutions 20,21,22 - HOMEWORK - Fall 2009...

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HOMEWORK - Fall 2009 – Chapters 1 through 7 20. (2 points) Acme Co.’s aging schedule as of year-end is given below: Days Account is o/s Amount Prob. Collection Prob. NOT collected Amount 0 – 30 $6,500,000 99.0% 1% $ 65,000 31 – 60 4,000,000 97.0 3% $120,000 61 – 90 3,200,000 92.0 8% $256,000 91- 120 1,100,000 81.0 19% $209,000 121-150 500,000 70.0 30% $150,000 over 150 days 200,000 50.0 50% $100,000 $900,000 Acme accounts for bad debts using the allowance method. Beginning of the year, allowance $1,300,000 During the year, Acme wrote off $1,200,000 During the year, Acme did not have any subsequent collections $ 0 Provisions made to allowance account ( bad debt expense for the year ) $ X End of the year, allowance (per above calculation) $ 900,000 X = $800,000 21. (1.5 points) L Co. prepared an aging and determined that the NRV of the receivables was $405,000. Allowance for uncollectible accounts at 1/1/07—credit balance $ 40,000 Minus accounts written off as uncollectible during 2007
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This note was uploaded on 11/08/2010 for the course ACT ACT3391 taught by Professor R.turpin during the Fall '10 term at Troy.

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HomeworkFall2009Solutions 20,21,22 - HOMEWORK - Fall 2009...

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