So 2 4 5 6 7 8 problems set b p9 1b at dill imports

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(SO 2, 4, 5, 6, 7, 8) PROBLEMS: SET B P9-1B At December 31, 2009, Dill Imports reported the following information on its balance sheet. Accounts receivable $250,000 Less:Allowance for doubtful accounts 15,000 During 2010, the company had the following transactions related to receivables. 1. Sales on account $2,400,000 2. Sales returns and allowances 45,000 3. Collections of accounts receivable 2,250,000 4. Write-offs of accounts receivable deemed uncollectible 12,000 5. Recovery of bad debts previously written off as uncollectible 3,000 Prepare journal entries related to bad debts expense. (SO 2, 3, 9) PDF Watermark Remover DEMO : Purchase from to remove the watermark
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Instructions (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts 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 accounts receivable indicates that estimated bad debts are $22,000. (d) Compute the accounts receivable turnover ratio for the year 2010. P9-2B Information related to Bee Company for 2010 is summarized below. Total credit sales $1,100,000 Accounts receivable at December 31 369,000 Bad debts written off 22,150 Instructions (a) What amount of bad debts expense will Bee Company report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Bee Company decides to estimate its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Bee record if Allowance for Doubtful Accounts has a credit balance of $3,000? (c) Assume that Bee Company decides to estimate its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Bee Company record if Allowance for Doubtful Accounts has a credit balance of $4,000? (d) Assume the same facts as in (c), except that there is a $2,000 debit balance in Allowance for Doubtful Accounts.What amount of bad debts expense will Bee record? (e) What is the weakness of the direct write-off method of reporting bad debts expense? P9-3B Presented below is an aging schedule for Jafar Company. Problems: Set B 429 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 Akers Baietto Comer DeJong Others Total Estimated Bad Debts $ 4,110 Estimated Percentage Uncollectible 2% $ 45,000 138,000 22,500 $ 54,570 $ 30,000 75,000 45,000 57,000 189,000 $396,000 $57,000 9,000 $66,000 $45,000 $45,000 $16,500 19,500 22,500 $36,000 $ 13,500 7,500 $43,500 $205,500 $ 2,610 6% $ 3,600 10% $ 11,250 25% $33,000 50% Journalize entries to record transactions related to bad debts. (SO 2, 3) At December 31, 2010, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $16,000. Instructions (a) Journalize and post the adjusting entry for bad debts at December 31, 2010.
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