l 2 2. At the end of the current year, Accounts Receivable has a balance of $285
ID: 2437949 • Letter: L
Question
l 2 2. At the end of the current year, Accounts Receivable has a balance of $285,000; Allowance for Doubtful Accounts has a credit balance of $9,000; and net sales for the year total $463,000. Using the aging of receivables method, the balance of the Allowance for Doubtful Accounts is estimated as $50,000 Determine the following: a. Using the Percent of Sales Method and 1% of net sales, what is the amount of the adjusting entry for uncollectible accounts? Balance of allowance for doubtful accounts-Allowance for doubtful accounts. 50,000-9000-41.000 b. Using the Analysis of Receivables Method, what is the ..unt of the adjusting entry for uncollectible accounts? 3. The following information is for employee Ella Dodd for the week ended March 15 Total hours worked:48 Rate: $15 per hour, with double time for all hours in excess of 40 Federal income tax withheld: $200 United Fund deduction: $50 Cumulative earnings prior to current week: $6,400 Tax rates: Social security: 6% on maximum earnings of $100,000. Medicare tax: 1.5% on all earnings, on both employer and employee State unemployment: 3.4% on maximum earnings of $7,000, on employer Federal unemployment: 0.8% on maximum earnings of$7,000; on employer (a) Determine (1) total earnings, (2) total deductions, and (3) cash paid. (1) $7240 (b) Determine each of the employer's payroll taxes related to the earnings of Ella Dodd for the week ended March 15. Post Ref Description Debit Credit Date Mar 15 Payroll Tax Espense Medicare Tax Payable State Tax PaExplanation / Answer
Solution 2a:
Bad debts expense for current year using percentage of sales methods = Net Sales * 1%
= $463,000 * 1% = $4,630
Solution 2b:
Estimated uncollectible accounts at the end of year = $50,000
Existing balance of allowance for doubtful accounts = $9,000 Credit
Bad debts expense to be recorded for the year = $50,000 - $9,000 = $41,000
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Journal Entries Particulars Debit Credit Bad debts expense Dr $4,630.00 To Allowance for doubtful accounts $4,630.00 (To record bad debts expense for the year)Related Questions
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