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In 2010 Wilkinson Company had net credit sales of $1,125,000. On January 1, 2010, Allowance for Doubtful Accounts had a credit balance of $27,000. During 2010, $45,000 of uncollectible accounts receivable were written off. Past experience indicates that the allowance should be 10% of the balance in receivables (percentage of receivables basis). If the accounts receivable balance at December 31 was $300,000, what is the required adjustment to the Allowance for Doubtful Accounts at December 31, 2010?

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Lelia Lubowitz
Lelia LubowitzLv2
29 Sep 2019

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The December 31, 2009 balance sheet of Hampton Company had Accounts Receivable of $500,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2010, the following transactions occurred: sales on account $1,600,000; sales returns and allowances, $50,000; collections from customers, $1,150,000; accounts written off $35,000; previously written off accounts of $5,000 were collected.Instructions(a)Journalize the 2010 transactions.(b)If the company uses the percentage of sales basis to estimate bad debts expense and anticipates 2% of net sales to be uncollectible, what is the adjusting entry at December 31, 2010?(c)If the company uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of accounts receivable, what is the adjusting entry at December 31, 2010?(d)Which basis would produce a higher net income for 2010 and by how much?last question that is kicking my tail.....
(AICPA Adapted)
At January 1, 2010, the credit balance in the allowance fordoubtful accounts of the Master Company was $400,00. For 2010, theprovision for doubtful accounts is based on a percentage of netsales. Net sales for 2010 were $50,000,000. Based on the latestavailable facts, the 2010 provision for doubtful accounts isestimated to be 0.7% of net sales. During 2010 , uncollectiblereceivables amounting to $410,000 were written off against theallowance for doubtful accounts.

Required: Prepare a schedule computing the balance in Master'sallowance for doubtful accounts at December 31,2010. Showsupporting computations in good form.

Nash Company had the following data on December 31, 20X1, before any adjustments: Accounts Receivable, December 31 Not past due $113,500 1 to 30 days past due $50,100 31 to 60 days past due $28,630 61 to 90 days past due $10,360 more than 90 days past due $4,500 Total Accounts Receivable, December 31 $207,090 Percentages of Accounts Receivable Estimated to be Uncollectible Not past due 2% 1 to 30 days past due 5% 31 to 60 days past due 10% 61 to 90 days past due 20% more than 90 days past due 50% Allowance for Doubtful Accounts, December 31 (before adjustment) $2,960 credit Total credit sales $4,094,000 Based on this data, estimate the amount of Bad Debt Expense that Nash Company should record in its December 31, 20X1 adjusting entry, and the ending balance (after adjustment) in the Allowance for Doubtful Accounts:

Allowance for Doubtful Accounts, Dec 31 (before adjustment): $2,960 credit

Bad Debt Expense:

Allowance for Doubtful Accounts, Dec 31 (after adjustment):

What is the Bad Debt Expense and Allowance for Doubtful Accounts, Dec 31 (after adjustment):

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