Question

1 JKL uses an aging schedule to estimate its uncolllectable accounts. Based on the following information, at what NET amount should JKL report accounts receivable?
Age in Days Accounts Receivable Percent Uncollectable
1-30 110,000 0.01
31-60 120,000 0.02
61-90 106,000 0.08
91-120 128,000 0.1

2 ABC Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2017. Its inventory at that date was $1,000,000 and the relevant price index was 1.00. Information regarding inventory for subsequent years is as follows:
Date Inventory at Current Prices   Current Price Index
31-Dec-18 $    1,285,200 1.08
31-Dec-19 $     1,450,000 1.25
31-Dec-20 $    1,625,000 1.3
What is the cost of the ending inventory at December 31, 2020 under dollar-value LIFO?
Accounts Receivable, net

Answer 1

1) Calculate ending estimated allowance for doubtful accounts

Days	Amount	% Uncollectible	$ Uncollectible
1-30	110000	0.01	1100
31-60	120000	0.02	2400
61-90	106000	0.08	8480
91-120	128000	0.10	12800
Total			24780

Net account receivable = 464000-24780 = $439220

2) Base year 2018 = 1285200/1.08 = 1190000

Base year 2019 = 1450000/1.25 = 1160000

Base year 2020 = 1625000/1.30 = 1250000

Cost of ending inventory = 1000000+(160000*1.08)+(90000*1.30) = 1289800