Quiz 4 Answers

Quiz 4 Answers - Aged(days 0-30 31-60 61-90 Over 90 Total...

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Name ___________________________ USC ID# _________________________ QUIZ 4 Each of the following has a separate set of facts. Prepare adjusting journal entry, in good format, for each situation. Show your work as to how you arrive at the amounts in the entries: 1. Using the percentage of credit sales method, make the entry to record bad debt expense Credit sales for the month were $125,000. It is estimated that 20% of the month’s sales will not be collected. No entry has been made to bad debt expense for the month. The balance in the allowance for doubtful accounts prior to making this entry is $30,000. Credit sales for the month 125,000 $ Estimated percentage of credit sales that are not collected 20% Bad debt expense 25,000 Allowance for doubtful accounts 25,000 2. Using the aging of accounts receivable method, make the entry to record bad debt expense Aged receivables and the percentage that is expected to be uncollectible are as follows:
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Unformatted text preview: Aged (days) 0-30 31-60 61-90 Over 90 Total Amounts $ 85,000 $25,000 10,000 $5,000 $125,000 Estimated % not collectible 10% 15% 25% 50% No entry has been made to bad debt expense for the month. The balance in the allowance for doubtful accounts prior to making this entry is $5,000. Days outstanding Amount % Estimated Uncollectible 0-30 85,000 $ 10% 8,500 $ 31-60 25,000 $ 15% 3,750 $ 61-90 10,000 $ 25% 2,500 $ Over 90 5,000 $ 50% 2,500 $ Total 125,000 $ 17,250 $ -Balance in Allowance before entry 5,000 Bad debt expense 12,250 Allowance for doubtful accounts 12,250 Page 1 of 2 3. During the month it was determined that a specific account with a balance of $ 750 would not be collected. Prepare the entry that is required to reflect this information. Allowance for doubtful accounts 750 Accounts receivable 750 Page 2 of 2...
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This note was uploaded on 04/01/2012 for the course BUAD 280 taught by Professor Wan during the Fall '11 term at USC.

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Quiz 4 Answers - Aged(days 0-30 31-60 61-90 Over 90 Total...

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