(a) Prepare the journal entries to record each of these five transactions. Assum
ID: 2585193 • Letter: #
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(a) Prepare the journal entries to record each of these five transactions. Assume tha no cash discounts were taken on the collections of accounts receivable. (b) Enter the January 1, 2015, balances in Accounts Receivable and Allowance for Doubtful (c) Prepare the journal entry to record bad debt expense for 2015, assuming that an aging (d) Compute the accounts receivable turnover for 2015, assuming the expected bad debt P8-2A Information related to Mingenback Company for 2015 is summarized below. Accounts, post the entries to the two accounts (use Taccounts), and determine the balances of accounts receivable indicates that expected bad debts are $115,000 information provided in (c) Total credit sales Accounts receivable at December 31 Bad debts written off $2,500,000 875,000 33,000 Instructions (a) What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Mingenback Company estimates its bad debt expense to be 2% of credit (c) Assume that Mingenback Company estimates its bad debt expense based on 6% of (d) Assume the same facts as in (c), except that there is a $3,000 debit balance in Allowance (e) what is the weakness of the direct write-off method of reporting bad debt P8-3A Presented below is an aging schedule for Halleran Company. sales. What amount of bad debt expense will Mingenback record if it has an Allow ance for Doubtful Accounts credit balance of $4,000? accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $3,000? for Doubtful Accounts. What amount of bad debt expense will Mingenback record? expense? Worksheet.xls Home Insert Page Layout Formulas Data Review Number of Days Past Due Not Yet Due 31-60 10,000 $12,000 61-90 Over 90 Customer Total 4 Anders 5 Blake 6 Coulson 7 Deleon 8 Others $ 22,000 40,000 $ 40,000 16,000 35,000 57,000 34,000 6,000 $34,000 96,000 16,000 14,000 285,000 $152,000 $32,000 $26,000 $35,000 $40,000 Estimated 10 Percentage Uncollectible, Total Estimated =a = 6% 13% 25% so - Bad Debts $38,610 s 4,560 1 s 3380 1,920 8,750 $20,000Explanation / Answer
P8-2A a Amount of bad debt expense = 33000 b Amount of bad debt expense = 2500000*2% = 50000 c Amount of bad debt expense = (875000*6%)-3000= 49500 d Amount of bad debt expense = (875000*6%)+3000= 55500 e Under direct write off method, bad debts expense are recognized when actually written off. This method viloates the matching concept of accounting which requires expenses to be recognized in the same period as revenue is recognized
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