So 2 3 9 b accounts receivable 1210000 ada 14000 c

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(SO 2, 3, 9) (b) Accounts receivable $1,210,000 ADA $14,000 (c) Bad debts expense $101,000 Compute bad debts amounts. (SO 3) Journalize entries to record transactions related to bad debts. (SO 2, 3) Worksheet.xls File Edit View Insert Format Tools Data Window Help A B C D E F G Number of Days Past Due 1 2 3 4 5 6 7 8 9 10 11 12 Customer Total Not Yet Due 1–30 31–60 61–90 Over 90 Arndt Blair Chase Drea Others Total Estimated Bad Debts Estimated Percentage Uncollectible $ 4,560 3% $ 40,000 96,000 16,000 $ 42,610 $ 22,000 57,000 40,000 34,000 132,000 $285,000 $34,000 6,000 $40,000 $35,000 $35,000 $12,000 14,000 16,000 $26,000 $10,000 6,000 $32,000 $152,000 $ 1,920 6% $ 3,380 13% $ 8,750 25% $24,000 60% PROBLEMS: SET A P9-1A At December 31, 2009, Leis Co. reported the following information on its balance sheet. Accounts receivable $960,000 Less:Allowance for doubtful accounts 80,000 During 2010, the company had the following transactions related to receivables. 1. Sales on account $3,200,000 2. Sales returns and allowances 50,000 3. Collections of accounts receivable 2,810,000 4. Write-offs of accounts receivable deemed uncollectible 90,000 5. Recovery of bad debts previously written off as uncollectible 24,000 Instructions (a) Prepare the journal entries to record each of these five transactions.Assume that no cash dis- counts were taken on the collections of accounts receivable. (b) Enter the January 1, 2010, balances in Accounts Receivable and Allowance for Doubtful Accounts, post the entries to the two accounts (use T accounts), and determine the balances. (c) Prepare the journal entry to record bad debts expense for 2010, assuming that an aging of ac- counts receivable indicates that expected bad debts are $115,000. (d) Compute the accounts receivable turnover ratio for 2010. P9-2A Information related to Hermesch Company for 2010 is summarized below. Total credit sales $2,200,000 Accounts receivable at December 31 825,000 Bad debts written off 33,000 Instructions (a) What amount of bad debts expense will Hermesch Company report if it uses the direct write- off method of accounting for bad debts? (b) Assume that Hermesch Company estimates its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $4,000? (c) Assume that Hermesch Company estimates its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Hermesch record if it has an Allowance for Doubtful Accounts credit balance of $3,000? (d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance for Doubtful Accounts.What amount of bad debts expense will Hermesch record? (e) What is the weakness of the direct write-off method of reporting bad debts expense? P9-3A Presented below is an aging schedule for Zillmann Company. At December 31, 2010, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000. PDF Watermark Remover DEMO : Purchase from to remove the watermark
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Instructions (a) Journalize and post the adjusting entry for bad debts at December 31, 2010.
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