ACCT 2001 Study Guide - Quiz Guide: Trial Balance

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15 Oct 2018

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Class 13 review exercise (answer these questions and check answers as soon as possible after each class) The trial balance, before adjustments, for james company at december 31, 2011 shows the following balances: Using the above data, give the necessary journal entry for each of the following independent situations: james company wants to maintain the allowance for doubtful accounts at 5% of. ,000 gross accounts receivable: james company wishes to increase the allowance for doubtful accounts by 1 % of net sales. Answers to class 13 quiz: dr. bad debt expense. Note: the allowance for doubtful accounts on the trial balance, before adjustments, has a debit balance rather than the usual, expected balance in a contra-asset account, a. This happened because james company wrote off more bad debts than had previously been estimated to be uncollectible during 2011. [(,000 x 5%) + ,120: dr. bad debt expense.

Related Questions

The trial balance before adjustment of Risen Company reports the following balances:

	Dr.	Cr.
Accounts receivable	$300,000
Allowance for doubtful accounts		$5,000
Sales (all on credit)		1,700,000
Sales returns and allowances	80,000

nstructions

(a) Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be 6% of gross accounts receivable.

(b) Assume that all the information above is the same, except that the Allowance for Doubtful Accounts has a debit balance of $5,000 instead of a credit balance. How will this difference affect the journal entries in part (a)?

jadeclam532

Problem 9-1A (P9-1A) December 31, 2007, Leis Co. reported thefollowing information on its balance sheet.
Accounts receivable $960,000
Less: Allowance for doubtful accounts 80,000
During 2008, the company had the following transactions related toreceivables.
1. Sales on account $3,200,000
2. Sales returns and allowances 50,000
3. Collections of accounts receivable 2,810,000
4. Write-offs of accounts receivable deemed uncollectible90,000
5. Recovery of bad debts previously written off as uncollectible24,00 Compute the accounts receivable turnover ratio for 2008

Instruction
1. Prepare the journal entries to record each of these fivetransactions. Assume that no cash discounts were taken on thecollections of accounts receivable.
2. Enter the January 1, 2008, balances in Accounts Receivable andAllowance for Doubtful Accounts, post the entries to the twoaccounts (use T accounts), and determine the balances.
3. Compute the accounts receivable turnover ratio for 2008,assuming that aging of accounts receivables indicates that expectedbad debts are $115,000.
4. Compute the accounts receivable turnover ratio for 2008.

ivorykoala535

From the inception of operations to December 31, 2020, Metlock Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments to the allowance account were made. Metlock’s usual credit terms are net 30 days.

The balance in Allowance for Doubtful Accounts was $114,400 (Cr.) on January 1, 2020. In 2020, credit sales totaled $7,920,000, the provision for doubtful accounts was determined to be $158,400, $79,200 of bad debts were written off, and recoveries of accounts previously written off amounted to $13,200. Metlock installed a computer system in November 2020, and the aging of accounts receivable was prepared for the first time as of December 31, 2020. A summary of the aging is as follows.

Classification by Month of Sale	Balance in Each Category	Estimated % Uncollectible
November - December 2020	$950,400	2%
July - October	$572,000	10%
January - June	$369,600	25%
Prior to 1/1/20	$132,000	80%
	$2,024,000

Based on the review of the collectibility of the account balances in the “prior to 1/1/20” aging category, additional receivables totaling $52,800 were written off as of December 31, 2020. The 80% uncollectible estimate applies to the remaining $79,200 in the category. Effective with the year ended December 31, 2020, Metlock adopted a different method for estimating the allowance for doubtful accounts at the amount indicated by the year-end aging analysis of accounts receivable.

Prepare a schedule analyzing the changes in Allowance for Doubtful Accounts for the year ended December 31, 2020. Show supporting computations in good form. (Hint: In computing the 12/31/20 allowance, subtract the $52,800 write-off.)

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ACCT 2001 Study Guide - Quiz Guide: Trial Balance

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