Exam 8: Receivables

The direct write-off method of accounting for uncollectible accounts

To record estimated uncollectible receivables using the allowance method, the adjusting entry would be a

The maturity value of a 12%, 60-day note for $5,000 is $5,600.

Which of the following receivables would not be classified as an "other receivable"?

Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

Morry Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: Required: 1) Journalize the write-offs for the current year under the direct write-off method. 2) Journalize the write-offs for the current year under the allowance method. Also, journalize the adjusting entry for uncollectible receivables assuming the company made $2,400,000 of credit sales during the year and the industry average for uncollectible receivables is 1.50% of credit sales. 3) How much higher or lower would Morry Company's net income have been under the direct write-off method than under the allowance method?

When referring to a note receivable or promissory note

Two methods of accounting for uncollectible accounts are the

For each of the following scenarios, indicate the amount of the adjusting journal entry for bad debt expense to be recorded, the balance in allowance for doubtful accounts after adjustment at December 31, and the net realizable value of accounts receivable at December 31. a) Based on an analysis of Simmon's Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment. b) Blake Company had net credit sales of $900,000 at year-end, and has an Accounts Receivable balance of $425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 before adjustment. Blake estimates bad debt expense as 3/4 of 1% of net credit sales. c) Hidgon Inc. has a balance of $812,000 in Accounts Receivable at December 31. An analysis of those receivables shows $24,000 will probably not be collected. Before adjusting entries are prepared, the Allowance for Doubtful Accounts has a debit balance of $750.

The term "receivables" includes all

Interest on a note can be calculated without knowledge of the

An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

At the end of the current year, Accounts Receivable has a balance of $750,000; Allowance for Doubtful Accounts has a debit balance of $6,200; and sales for the year total $3,500,000. Bad debt expense is estimated at 1/2 of 1% of sales. Determine a) the amount of the adjusting entry for bad debt expense; b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and c) the net realizable value of accounts receivable.

An alternative name for bad debt Expense is an)

Match each description to the appropriate term a-d). Each term may be used more than once. -This method focuses on the income statement.

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include a

The balance of Allowance for Doubtful Accounts is added to Accounts Receivable on the balance sheet.

Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.