ACT3391Spring2011TraditionalHomeworkNos25to41

ACT3391Spring2011TraditionalHomeworkNos25to41 - HOMEWORK...

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Spring 2011 ACT3391 ALL homework assignments must be completed by using some type of computer software program, e.g., word. NO 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: Debit Credit Sales $600,000 Sales returns and allowance $20,000 Accounts receivable 75,000 Allowance for doubtful accounts 2,000 Prepare the proper adjusting journal entry for each of the following situations: o The estimate of uncollectibles is made by taking 2.5% of gross sales o The estimate of uncollectibles is made by taking 3.0% of net sales o The estimate of uncollectibles is made by taking 26% of gross accounts receivable o The estimate of uncollectibles is made by taking 25% of gross accounts receivable AND 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 $ 51,000 Accounts written off as uncollectible during 2010 44,000 Accounts receivable at 12/31/10 450,000 Uncollectible accounts recovered during 2010 6,000 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 Amount Probability of Collection 0 – 30 $8,000,000 98.0% 31 – 60 5,000,000 90.0 61 – 90 3,200,000 80.0 91- 120 1,600,000 55.0 121-150 800,000 45.0 150 – 180 500,000 25.0 over 180 days 100,000 15.0 Acme accounts for bad debts using the allowance method. At the beginning of the year, the allowance had a credit balance of $2,150,000. 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. 1
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This note was uploaded on 03/08/2011 for the course ACCT 3391 taught by Professor Turpin during the Spring '10 term at Troy.

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ACT3391Spring2011TraditionalHomeworkNos25to41 - HOMEWORK...

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