Awar d 016outof 016points e6 12 computing bad debt

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Unformatted text preview: doubtful accounts Allowance for doubtful accounts Accounts receivable Worksheet P6­4 Part 1 Debit 16 16 Credit 16 16 Learning Objective: 06­04 Estimate, report, and evaluate the effects of uncollectible accounts receivable (bad debts) on financial statements. P6-4 Part 1 Required: 1. Rec ord the journal entries related to bad debts for y ear 3. (Enter your answers in thousands. Om it the "$" sign in your response.) General J ournal Bad debt ex pens e Allowanc e for doubtful ac c ounts Allowanc e for doubtful ac c ounts Ac c ounts rec eiv able Debit 16 ± 2% 16 ± 2% Credit 16 ± 2% 16 ± 2% 7. awar d: 0.16 out of 0.16 points E6-12 Computing Bad Debt Expense Using Aging Analysis LO4 Gary 's Dairy us es the aging approac h to es timate bad debt ex pens e. The balanc e of eac h ac c ount rec eiv able is aged on the bas is of three time periods as follows : (1) not y et due, $16,000, (2) up to 120 day s pas t due, $5,500, and (3) more than 120 day s pas t due, $2,500. Ex perienc e has s hown that for eac h age group, the av erage los s rate on the amount of the rec eiv ables at y ear­end due to unc ollec tability is (1) 2 perc ent, (2) 14 perc ent, and (3) 35 perc ent, res pec tiv ely . At Dec ember 31, 2011 (end of the c urrent y ear), the Allowanc e for Doubtful Ac c ounts balanc e is $900 (c redit) before the end­of­period adjus ting entry is made. Required: What amount s hould be rec orded as Bad Debt Ex pens e for the c urrent y ear? (Om it the "$" sign in your response.) Bad debt ex pens e $ 1,065 E6­12 Computing Bad Debt Expense Using Aging Analysis LO4 Worksheet Learning Objective: 06­04 Estimate, report, and evaluate the effects of uncollectible accounts receivable (bad debts) on financial statements. E6-12 Computing Bad Debt Expense Using Aging Analysis LO4 Gary 's Dairy us es the aging approac h to es timate bad debt ex pens e. The balanc e of eac h ac c ount rec eiv able is aged on the bas is of three time periods as follows : (1) not y et due, $16,000, (2) up to 120 day s pas t due, $5,500, and (3) more than 120 day s pas t due, $2,500. Ex perienc e has s hown that for eac h age group, the av erage los s rate on the amount of the rec eiv ables at y ear­end due to unc ollec tability is (1) 2 perc ent, (2) 14 perc ent, and (3) 35 perc ent, res pec tiv ely . At Dec ember 31, 2011 (end of the c urrent y ear), the Allowanc e for Doubtful Ac c ounts balanc e is $900 (c redit) before the end­of­period adjus ting entry is made. Required: What amount s hould be rec orded as Bad Debt Ex pens e for the c urrent y ear? (Om it the "$" sign in your response.) Bad debt ex pens e $ 1,065 ± 2% Explanation: Aged ac c ounts rec eiv able Not y et due $ 16,000 Up to 120 day s pas t due 5,500 Ov er 120 day s pas t due 2,500 × × × Es timated perc entage unc ollec tible 2% 14% 35% Es timated balanc e in Allowanc e for Doubtful Ac c ounts Current balanc e in Allowanc e for Doubtful Ac c ounts Bad Debt Ex pens e for the y ear Es timated amount unc ollec tible = $ 320 = 770 = 875 1,965 900 1,065 $...
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This homework help was uploaded on 02/23/2014 for the course BUSE 30000 taught by Professor N/a during the Winter '12 term at UChicago.

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