Chapter 07 Problem Solution Answer

Chapter 07 Problem Solution Answer - 88,600 Balance at...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
PROBLEM 7-4 (a) FORTNER CORPORATION Analysis of Changes in the Allowance for Doubtful Accounts For the Year Ended December 31, 2010 Balance at January 1, 2010. .................................................................................... $130,000 Provision for doubtful accounts ($9,000,000 X 2%). ............................................ 180,000 Recovery in 2010 of bad debts written off previously. ........................................ 15,000 325,000 Deduct write-offs for 2010 ($90,000 + $60,000). .................................................... 150,000 Balance at December 31, 2010 before change in accounting estimate. ....................................................................................... 175,000 Increase due to change in accounting estimate during 2010 ($263,600 – $175,000). ....................................................................
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 88,600 Balance at December 31, 2010 adjusted (Schedule 1). ........................................ $263,600 Schedule 1 Computation of Allowance for Doubtful Accounts at December 31, 2010 Aging Category Balance % Doubtful Accounts NovDec 2010 $1,080,000 2 $ 21,600 JulyOct 650,000 10 65,000 JanJun 420,000 25 105,000 Prior to 1/1/10 90,000(a) 80 72,000 $263,600 (a) $150,000 $60,000 (b) The journal entry to record this transaction is as follows: Bad Debt Expense. ..................................................................... $88,600 Allowance for Doubtful Accounts. ....................................... (To increase the allowance for doubtful accounts December 31, 2010, resulting from a change in accounting estimate) $88,600...
View Full Document

This note was uploaded on 09/29/2011 for the course ACC 311 taught by Professor Hiles during the Spring '11 term at University of Phoenix.

Ask a homework question - tutors are online