LE5 - 2. Determine the effect on ABs accounting equation...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Lab Experience #5 – V1 Group Exercise: At the beginning of 2004, AB Tech Company’s Accounts Receivable balance was $110,000, and the balance in the Allowance for Doubtful Accounts was $2,500. AB Tech’s sales in 2004 were $1,000,000, 80% of which were on credit. Collections on account during the year were $600,000. The company wrote off $6,000 of uncollectible accounts during the year. Required: 1. Determine the effect on AB’s accounting equation of the estimate of bad debts assuming bad debt expense is 2% of credit sales. ASSETS = LIABILITIES + OWNERS EQUITY
Background image of page 1

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

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 2. Determine the effect on ABs accounting equation relative to the write-offs of accounts receivable during 2004. ASSETS = LIABILITIES + OWNERS EQUITY 3. What is the net realizable value of ABs accounts receivable on December 31, 2004, after recording the above two entries. Gross Allowance Accounts Receivable for DoubtfulAccounts Dr Cr Dr Cr Beginning Balance $ 110,000 $2,500 Sales on Account Collections (1) Debt Expense Entry (2) Debt Write Off Entry Ending Balance $ Net Realizable Value= Accounts Receivable-Allowance for DA...
View Full Document

This note was uploaded on 06/15/2011 for the course ACCT 23020 taught by Professor Dorff,p during the Spring '08 term at Kent State.

Page1 / 3

LE5 - 2. Determine the effect on ABs accounting equation...

This preview shows document pages 1 - 3. Sign up to view the full document.

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