Question

1. Kingbird Company’s unadjusted trial balance at December 31, 2020, included the following accounts.

		Debit		Credit
Accounts receivable		$55,400
Allowance for doubtful accounts		5,960
Net sales				$1,262,800

Kingbird Company estimates its bad debt expense to be 6% of gross accounts receivable. Determine its bad debt expense for 2020.

Bad debt expense for 2020

$

3. Waterway Co. provides for doubtful accounts based on 2% of gross accounts receivable, The following data are available for 2020.

Credit sales during 2020		$4,351,800
Bad debt expense		58,400
Allowance for doubtful accounts 1/1/20		15,380
Collection of accounts written off in prior years (customer credit was reestablished)		8,190
Customer accounts written off as uncollectible during 2020		28,860

What is the balance in Allowance for Doubtful Accounts at December 31, 2020?

Allowance for doubtful accounts 12/31/20

$

4. At the end of its first year of operations, December 31, 2020, Wildhorse Inc. reported the following information.

Accounts receivable, net of allowance for doubtful accounts		$898,100
Customer accounts written off as uncollectible during 2020		21,630
Bad debt expense for 2020		82,350

What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?

Accounts receivable, before deducting allowance for doubtful accounts

$

Answer 1

1
Estimated uncollectible	3324	=55400*6%
Add: Allowance for doubtful accounts debit balance	5960
Bad debt expense for 2020	9284
3
Allowance for doubtful accounts 1/1/20	15380
Add: Bad debt expense	58400
Add: Collection of accounts written off	8190
Less: Customer accounts written off	-28860
Allowance for doubtful accounts 12/31/20	53110
4
Accounts receivable, net of allowance for doubtful accounts	898100
Add: Allowance for doubtful accounts	60720	=82350-21630
Accounts receivable, before deducting allowance for doubtful accounts	958820