ALL homework assignments must be completed by using some type of computer software program, e.g., word.
CREDIT WILL BE GIVEN FOR LATE HOMEWORK.
When completing your homework assignments, DO NOT
use abbreviations, e.g., spell out Accounts Payable instead of simply writing AP.
As discussed during class, you can
work on these homework assignments in groups or as an individual.
25. (4 points)
A trial balance before adjustments included the following:
Sales returns and allowance
Allowance for doubtful accounts
Prepare the proper adjusting journal entry
for each of the following situations:
The estimate of uncollectibles is made by taking 2.5% of gross sales
The estimate of uncollectibles is made by taking 3.0% of net sales
The estimate of uncollectibles is made by taking 26% of gross accounts receivable
The estimate of uncollectibles is made by taking 25% of gross accounts receivable
the allowance for
doubtful accounts has a debit
balance of $400
26. (2 points) Ace Co. prepared an aging of its accounts receivable at December 31, 2010 and determined that the net
realizable value of the receivables was $400,000.
Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/10—credit balance
Accounts written off as uncollectible during 2010
Accounts receivable at 12/31/10
Uncollectible accounts recovered during 2010
For the year ended December 31, 2010, what was Ace's uncollectible accounts expense?
SHOW YOUR WORK.
27. (3 points)
Acme Co.’s aging schedule as of year-end is given below:
No. of Days Account is Outstanding
Probability of Collection
0 – 30
31 – 60
61 – 90
150 – 180
over 180 days
Acme accounts for bad debts using the allowance method.
At the beginning of the year, the allowance had a credit balance
During the year, Acme wrote off $1,890,000 of ARs.
During the year, Acme collected $47,000 of accounts
previously written off the previous year.
What is Acme’s bad debt expense for the year?
SHOW YOUR WORK.
28. (3 points)
The following pertains to J Company for the year ended 12-31-10.
J estimates its allowance for doubtful
ARs using an aging analysis.
During the year, there were no
subsequent collections of ARs previously written off.