B journalize and post to the allowance account the

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(b) Journalize and post to the allowance account the following events and transactions in the year 2011. (1) March 1, a $1,900 customer balance originating in 2010 is judged uncollectible. (2) May 1, a check for $1,900 is received from the customer whose account was written off as uncollectible on March 1. (c) Journalize the adjusting entry for bad debts on December 31, 2011. Assume that the unad- justed balance in Allowance for Doubtful Accounts is a debit of $2,000, and the aging sched- ule indicates that total estimated bad debts will be $42,300. (b) Accounts receivable $343,000 ADA $6,000 (c) Bad debts expense $16,000 (a) Bad debts expense $38,570 (c) Bad debts expense $44,300 Compute bad debts amounts. (SO 3) PDF Watermark Remover DEMO : Purchase from www.PDFWatermarkRemover.com to remove the watermark
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430 Chapter 9 Accounting for Receivables P9-4B The following represents selected information taken from a company’s aging schedule to estimate uncollectible accounts receivable at year end. Instructions (a) Calculate the total estimated bad debts based on the above information. (b) Prepare the year-end adjusting journal entry to record the bad debts using the allowance method and the aged uncollectible accounts receivable determined in (a). Assume the cur- rent balance in the Allowance for Doubtful Accounts account is a $3,000 credit. (c) Of the above accounts,$1,600 is determined to be specifically uncollectible.Prepare the jour- nal entry to write off the uncollectible accounts. (d) The company subsequently collects $700 on a specific account that had previously been de- termined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the ac- count and record the cash collection. (e) Explain how establishing an allowance account satisfies the matching principle. P9-5B At December 31, 2010, the trial balance of Liquid Snake Company contained the fol- lowing amounts before adjustment. Debits Credits Accounts Receivable $250,000 Allowance for Doubtful Accounts $ 1,100 Sales 600,000 Instructions (a) Prepare the adjusting entry at December 31, 2010, to record bad debts expense under each of the following independent assumptions. (1) An aging schedule indicates that $12,500 of accounts receivable will be uncollectible. (2) The company estimates that 2% of sales will be uncollectible. (b) Repeat part (a) assuming that instead of a credit balance, there is a $1,100 debit balance in Allowance for Doubtful Accounts. (c) During the next month, January 2011, a $3,200 account receivable is written off as uncol- lectible. Prepare the journal entry to record the write-off. (d) Repeat part (c) assuming that Liquid Snake Company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable. (e) What are the advantages of using the allowance method in accounting for uncol- lectible accounts as compared to the direct write-off method? P9-6B Marty Co. closes its books monthly. On June 30, selected ledger account balances are: Notes Receivable $57,000 Interest Receivable 420 Notes Receivable include the following.
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