Chapter 5 Bad Debt Examples

Chapter 5 Bad Debt Examples - beginning balance in the...

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1. Luci uses the Aging of Receivables method to calculate bad debt and has a beginning balance in the Allowance account of $10,000 (debit). Given the following information about their receivables, what is bad debt expense and the ending balance in the Allowance Account? Amount Age % bad $200,000 0-30 days 1 % $ 45,000 31-60 days 5 % $ 15,000 61-90 days 20 % $ 8,000 90+ days 30 % 2. Carter uses the % of sales method to calculate bad debt expense and has a beginning balance in the Allowance account of $2,000 (credit). They estimate that 6% of their $500,000 in sales will be uncollectible. What is the bad debt expense and the ending balance in the Allowance account? 3. Macon uses the aging method to calculate bad debt expense and has a
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Unformatted text preview: beginning balance in the allowance account BEFORE ANY ADJUSTMENTS of $15,000 (credit). During the year they wrote off $10,000 in bad debt and recovered $5,000 in previously written off bad debt. They estimate that $12,000 of their $300,000 in receivables will prove to be uncollectible. What is bad debt expense, the ending balance in the allowance account, and the net realizable value of their accounts receivable? Bad Debt Expense Examples 4. Angus has the following information available: 12/31/2008 12/31/2007 A/R $2,000,000 $2,550,000 Net Sales for 2008, all credit, were $31,850,000. a. What was Angus A/R turnover for 2008? b. What was Angus Days in Receivable for 2008?...
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Chapter 5 Bad Debt Examples - beginning balance in the...

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