Your Answer c. Identify the amount of bad debts expense that Honey Boo Boo Redne

Question

Your Answer

c.

Identify the amount of bad debts expense that Honey Boo Boo Redneck Enterprises Inc. reported in its income statement for the year ended December 31, 2017: (2 points)

d. Provide the proper presentation of accounts receivable in the GAAP balance sheet of Honey Boo Boo Redneck Enterprises Inc. at December 31, 2017 including the appropriate description and the amount reported: (2 points)

Supporting Computation Required:

Balance Sheet at December 31, 2017:

Amount

Current Assets:

Your Answer

c.

Identify the amount of bad debts expense that Honey Boo Boo Redneck Enterprises Inc. reported in its income statement for the year ended December 31, 2017: (2 points)

Part #1: Honey Boo Boo Redneck Enterprises Inc. (10 points) Honey Boo Boo Redneck Enterprises Inc. uses the allowance method to record bad debts expense and estimates that 4.5% of accounts receivable will be uncollectible. The following information was gathered from the accounting records at December 31, 2017 PRIOR to the recording of the year-end adjustment for bad debts Cr. $6,200,000 Sales on credit Sales returns Accounts receivable Allowance for doubtful accounts Dr. $150,000 $5,900 $1,150,000 a. Prepare the adjusting entry required to record the provision for bad debts. (4 points) DATE ACCOUNT NAMES DEBIT CREDIT Supporting Computation Required:

Explanation / Answer

A. Calculation of Total receivables at the end

Bad debts= 4.5%*7200000= $324000

Adjusting entry

C. Amount of bad debt expense to be recorded in income statement is $324000 which is 4.5% of receivables

D. In balance sheet under the head assets

And sub head curret assets, accounts receivables will be shown (net amount)

Account receivables= $7200000

Less: Provision for bad debts= ($318100)

Net balance= $6881900

Thus , in balance sheet amount of net receivables to be shown is $6881900

Do give your feedback!! Happy Learning :)

Particular $ Opening balance 1150000 + credit sales 6200000 - Returns (150000) Closing balance of receivables 7200000

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