The following was taken from the records of Smith Company in the year ending Dec
ID: 2525788 • Letter: T
Question
The following was taken from the records of Smith Company in the year ending December 31, 20X7. Journalize the following transactions in an Excel spreadsheet for year-end 20X7 using the aging method. Assume that the allowance for doubtful accounts has a beginning credit balance of $8,000 on January 1, 20X7. The assignment template is attached below.
Label the transactions below as journal entries #1 to #4, along with the dates of the entries:
February 20, 20x7: Wrote off Jones account: $250.
May 20, 20x7: Received $410 as partial payment on the $700 account receivable due from Garcia.
August 10, 20x7: Received $725 from Jones on the account written off on February 20, 20x7.
September 15: Wrote off the individual account receivables for the following customers as payment not expected in future: Tang: $400; Mulaka: $210; Quan: $375.
December 31, 20x7: Smith Company prepared the following aging schedule for it accounts receivables:
$120,000 of Accounts Receivable (A/R) are 0-30 days late: 3% probability of being uncollectible.
$30,000 of A/R are 31-60 days late: 10% probability of being uncollectible.
$14,000 of A/R are 61-90 days late: 20% probability of being uncollectible
$1,000 of A/R are later than 90 days late: 50% probability of being uncollectible
Instructions:
Using the Excel spreadsheet template provided for this assignment, submit the following items:
The four journal entries (1 to 4 above) with a one-sentence description for each
The T-account for the allowance for doubtful accounts
The journal entry to record bad debt expense
The balance sheet presentation of net realizable value, including gross accounts receivables of $29,500
Company Company- December 31, 201X
The following was taken from the records of Smith Company in the year ending December 31, 20X7. Journalize the following transactions in an Excel spreadsheet for year-end 20X7 using the aging method. Assume that the allowance for doubtful accounts has a beginning credit balance of $8,000 on January 1, 20X7. The assignment template is attached below.
Label the transactions below as journal entries #1 to #4, along with the dates of the entries:
February 20, 20x7: Wrote off Jones account: $250.
May 20, 20x7: Received $410 as partial payment on the $700 account receivable due from Garcia.
August 10, 20x7: Received $725 from Jones on the account written off on February 20, 20x7.
September 15: Wrote off the individual account receivables for the following customers as payment not expected in future: Tang: $400; Mulaka: $210; Quan: $375.
December 31, 20x7: Smith Company prepared the following aging schedule for it accounts receivables:
$120,000 of Accounts Receivable (A/R) are 0-30 days late: 3% probability of being uncollectible.
$30,000 of A/R are 31-60 days late: 10% probability of being uncollectible.
$14,000 of A/R are 61-90 days late: 20% probability of being uncollectible
$1,000 of A/R are later than 90 days late: 50% probability of being uncollectible
Instructions:
Using the Excel spreadsheet template provided for this assignment, submit the following items:
The four journal entries (1 to 4 above) with a one-sentence description for each
The T-account for the allowance for doubtful accounts
The journal entry to record bad debt expense
The balance sheet presentation of net realizable value, including gross accounts receivables of $29,500
Company Company- December 31, 201X
Journal# Date Account Title Debit Credit a 20-Feb Allowance for doutful accounts Jones- Accounts receivable b 20-May Cash Garcia-Accounts Receivables c 10-Aug Cash Allowance for doubtful accounts d 15-Sep Allowance for doubtful accounts Tang-Accounts Receivable Mukala-Accounts Receivable Quan-Accounts Receivable Question 2 Dates T-Account for Allowance for doubtful accounts Debit Credit Begining balance 20-Feb 15-Sep Bad Debt Expense= Ending Balance Calculations: Aging schedule Days Late Accounts Receivable Amount Uncollection Probability Uncollectible Amount Question 3 Date Account Title Debit Credit 31-Dec Bad Debt Expense Allowance for doubtful accounts Question 4 Balance Sheet Presentaion Gross Accounts Receivables Ending Balance of Allowance for Doubtbul Accounts Net Realizable BalanceExplanation / Answer
Answers
Journal#
Date
Account Title
Debit
Credit
a
20-Feb
Allowance for doutful accounts
$ 250.00
Jones- Accounts receivable
$ 250.00
(Bad debts written off)
b
20-May
Cash
$ 410.00
Garcia-Accounts Receivables
$ 410.00
(cash received)
c
10-Aug
Cash
$ 725.00
Allowance for doubtful accounts
$ 725.00
(Cash received fron aaccount written off)
d
15-Sep
Allowance for doubtful accounts
$ 985.00
Tang-Accounts Receivable
$ 400.00
Mukala-Accounts Receivable
$ 210.00
Quan-Accounts Receivable
$ 375.00
(Bad debt written off)
Dates
T-Account for Allowance for doubtful accounts
Debit
Credit
Begining balance
$ 8,000.00
20-Feb
$ 250.00
15-Sep
$ 985.00
10-Aug
$ 725.00
Unadjusted balance
$ 7,490.00
Bad Debt expense [See Question 3 working solution]
$ 2,410.00
Ending Balance
$ 9,900.00
Days Late
Accounts Receivable Amount
Uncollection Probability
Uncollectible Amount
0-30
$ 1,20,000.00
3%
$ 3,600.00
31-60
$ 30,000.00
10%
$ 3,000.00
61-90
$ 14,000.00
20%
$ 2,800.00
90-x
$ 1,000.00
50%
$ 500.00
TOTAL
$ 1,65,000.00
$ 9,900.00
Date
Account Title
Debit
Credit
31-Dec
Bad Debt Expense
$ 2,410.00
Allowance for doubtful accounts
$ 2,410.00
Gross Accounts Receivables (A)
$ 1,65,000.00
Ending Balance of Allowance for Doubtful Accounts (B)
$ 9,900.00
Net Realizable Balance (A – B)
$ 1,55,100.00
Journal#
Date
Account Title
Debit
Credit
a
20-Feb
Allowance for doutful accounts
$ 250.00
Jones- Accounts receivable
$ 250.00
(Bad debts written off)
b
20-May
Cash
$ 410.00
Garcia-Accounts Receivables
$ 410.00
(cash received)
c
10-Aug
Cash
$ 725.00
Allowance for doubtful accounts
$ 725.00
(Cash received fron aaccount written off)
d
15-Sep
Allowance for doubtful accounts
$ 985.00
Tang-Accounts Receivable
$ 400.00
Mukala-Accounts Receivable
$ 210.00
Quan-Accounts Receivable
$ 375.00
(Bad debt written off)
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