Name __ 1. The balance in accounts receivable is $687,000. At the end of October
ID: 2395049 • Letter: N
Question
Name __ 1. The balance in accounts receivable is $687,000. At the end of October, Ace Company management estimates the uncollectible accounts expense to be 1 percent of net sales of $2,770,000. 1a. Give the entry to record the uncollectible accounts expense, assuming that the Allowance for Uncollectible Accounts has a debit balance of $14,000. DR ACCOUNT _____uncollectible accounts expense____ AMOUNT $___ CR ACCOUNT _To record estimated uncollectible accounts___________ AMOUNT $_
1b. What is the balance in the Allowance for Uncollectible Accounts after the above entry is made? $____________
1c. What is the amount of the Net Accounts Receivable on the balance sheet? $ ____________
2. The balance in the accounts receivable account is $984,000. An aging analysis on June 30 of the accounts receivable of James Corporation indicates uncollectible accounts of $43,000. Give the entry to record uncollectible accounts expense under each of the following independent assumptions: Assumption 1
2a. Give the journal entry to record the uncollectible accounts expense if the Allowance for Uncollectible Accounts has a credit balance of $9,000 before adjustment. DR ACCOUNT ____________________________________ AMOUNT $___________ CR ACCOUNT ____________________________________ AMOUNT $____________
2b. What is the balance in the Allowance for Uncollectible Accounts after the above entry is made? $ ____________
2c. What is the amount of the Net Accounts Receivable on the balance sheet? $ ____________
Assumption 2 2d.
Give the journal entry to record the uncollectible accounts expense if the Allowance for Uncollectible Accounts has a debit balance of $7,000 before adjustment. DR ACCOUNT ____________________________________ AMOUNT $________________ CR ACCOUNT ____________________________________ AMOUNT $________________ 2e. What is the balance in the Allowance for Uncollectible Accounts after the above entry is made? $ ____________
2f. What is the amount of the Net Accounts Receivable on the balance sheet? $ ____________
Explanation / Answer
Answers
Working
A
Net Sales
$ 27,70,000.00
B=A x 1%
Uncollectible Account Expense
$ 27,700.00
Answers
---- 1 ‘a’
Transaction
Accounts title
Debit
Credit
1 'a'
Uncollectible Account Expense
$ 27,700.00
Allowance for Uncollectible Accounts
$ 27,700.00
(Bad debt expense recorded)
--- 1 ‘b’
Beginning Balance - (Debit) Credit
$ (14,000.00)
Credited by Uncollectible Account expense
$ 27,700.00
Ending Balance - (Debit) Credit
$ 13,700.00
Hence, balance in Allowance account after entry is made = $ 13,700 Credit balance
---1 ‘c’
A
Accounts receivables balance
$ 6,87,000.00
B
Adjusted balance of Allowance of Uncollectible Accounts
$ 13,700.00
C=A-B
Net Accounts Receivables on Balance Sheet
$ 6,73,300.00
Answers
--- 2 ‘a’
A
Unadjusted Allowance for Uncollectible account balance
$ 9,000.00
Credit
B
Adjusted Balance required
$ 43,000.00
Credit
C=B - A
Amount of Uncollectible Expense by which account is required to be credited
$ 34,000.00
Transaction
Accounts title
Debit
Credit
2 'a'
Uncollectible Account Expense
$ 34,000.00
Allowance for Uncollectible Accounts
$ 34,000.00
(Bad debt expense recorded)
--- 2’b’
Beginning Balance - (Debit) Credit
$ 9,000.00
Credited by Uncollectible Account expense
$ 34,000.00
Ending Balance - (Debit) Credit
$ 43,000.00
---- 2 ‘c’
A
Accounts receivables balance
$ 9,84,000.00
B
Adjusted balance of Allowance of Uncollectible Accounts
$ 43,000.00
C=A-B
Net Accounts Receivables on Balance Sheet
$ 9,41,000.00
--- 2 ‘d’
A
Unadjusted Allowance for Uncollectible account balance
$ 7,000.00
Debit
B
Adjusted Balance required
$ 43,000.00
Credit
C = A + B
Amount of Uncollectible Expense by which account is required to be credited
$ 50,000.00
Transaction
Accounts title
Debit
Credit
2 'd'
Uncollectible Account Expense
$ 50,000.00
Allowance for Uncollectible Accounts
$ 50,000.00
(Bad debt expense recorded)
--- 2 ‘e’
Beginning Balance - (Debit) Credit
$ (7,000.00)
Credited by Uncollectible Account expense
$ 50,000.00
Ending Balance - (Debit) Credit
$ 43,000.00
--- 2 ‘f’
A
Accounts receivables balance
$ 9,84,000.00
B
Adjusted balance of Allowance of Uncollectible Accounts
$ 43,000.00
C=A-B
Net Accounts Receivables on Balance Sheet
$ 9,41,000.00
A
Net Sales
$ 27,70,000.00
B=A x 1%
Uncollectible Account Expense
$ 27,700.00
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