Question

Arundel Company uses percentage of sales to estimate uncollectibles. At the end of the fiscal year,...

Arundel Company uses percentage of sales to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance of $78,000 and had a total of $875,000 in credit sales. Arundel assumes that 1.5% of sales will eventually be uncollectible. before adjustment, the Allowance for Uncollectible Accounts had a credit balance of 6,000. What dollar amount should be credited to Allowance for Uncollectible Accounts at year end?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Accounts Receivable = $875,000

Uncollectible amount = 1.5% of sales

expected uncollectible amount = $875,000 * 1.5%

                                                  = $13,125

Allowance for uncollectible beginning balance =   $6,000

amount that should be credited to Allowance for Uncollectible Accounts at year end

= $13,125 - $6,000

= $7,125

So the Answer is $7,125.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018,...
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of: Dollar Value Age of Account Estimated Collectible $285,000 < 30 days old 99.0% 65,000 30 to 60 days old 94.5% 30,000 61 to 120 days old 70.0% 11,000 > 120 days old 12.0% The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted...
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018,...
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of: Dollar Value Age of Account Estimated Collectible $200,000 < 30 days old 99.0% 75,000 30 to 60 days old 93.5% 20,000 61 to 120 days old 71.0% 10,000 > 120 days old 18.0% The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted...
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018,...
Arundel Company uses aging to estimate uncollectibles.  At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of: Dollar Value Age of Account Estimated Collectible $200,000 < 30 days old 99.5% 60,000 30 to 60 days old 94.5% 40,000 61 to 120 days old 73.0% 7,000 > 120 days old 10.0% The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted...
Baltimore Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31,...
Baltimore Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of: Dollar Value Age of Account Estimated Collectible $105,000 < 30 days old 99% 80,000 30 to 60 days old 91% 25,000 61 to 120 days old 70% 9,000 > 120 days old 11% The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an...
Baltimore Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31,...
Baltimore Company uses aging to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts Receivable has a balance that consists of: Dollar Value                          Age of Account                Estimated Collectible $180,000                              < 30 days old                              99% 70,000                                 30 to 60 days old                         93% 35,000                                 61 to 120 days old                       79% 12,000                                 > 120 days old                             20% The current unadjusted Allowance for Uncollectible Accounts balance is a debit balance of $2,000 and the Bad Debt Expense accounts has an unadjusted balance of...
Lincoln uses income statement approach to estimate uncollectible accounts. During the year of 2019, total sales...
Lincoln uses income statement approach to estimate uncollectible accounts. During the year of 2019, total sales amount to $400,000 of which 37.5% is cash sales. Past experience indicate that 1.5% of credit sales are probable to be uncollectible. Prior to adjustment, the allowance for doubtful accounts has a credit balance of $1,500 at December 31, 2019. Total amount of accounts receivable, on the other hand, amount to $267,000 as of December 31, 2019. Instructions (25 points): Compute the uncollectible accounts...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2018, net credit sales totaled $6,400,000, and the estimated bad debt percentage is 1.40%. The allowance for uncollectible accounts had a credit balance of $61,000 at the beginning of 2018 and $49,500, after adjusting entries, at the end of 2018. Required: 1. What is bad debt expense for 2018 as a percent of net credit sales?...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is...
Johnson Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2018, net credit sales totaled $6,500,000, and the estimated bad debt percentage is 1.50%. The allowance for uncollectible accounts had a credit balance of $62,000 at the beginning of 2018 and $50,000, after adjusting entries, at the end of 2018. Required: 1. What is bad debt expense for 2018 as a percent of net credit sales?...
For the fiscal year ended December 31, 2016, Alpha Company had credits sales that amounted to...
For the fiscal year ended December 31, 2016, Alpha Company had credits sales that amounted to $300,000. Historically, 2.5% of credit sales are uncollectible. Alpha Company uses the percentage of sales method to determine its uncollectible accounts. The balance before any end of the year adjusting entry in the Allowance for Uncollectable Accounts is a credit value of $1,575. Use this information to prepare the adjusting General Journal entry (without explanation) for the fiscal year. If no entry is required...
Lincoln uses income statement approach to estimate uncollectible accounts. During the year of 2019, total sales...
Lincoln uses income statement approach to estimate uncollectible accounts. During the year of 2019, total sales amount to $400,000 of which 37.5% is cash sales. Past experience indicate that 1.5% of credit sales are probable to be uncollectible. Prior to adjustment, the allowance for doubtful accounts has a credit balance of $1,500 at December 31, 2019. Total amount of accounts receivable, on the other hand, amount to $267,000 as of December 31, 2019. Instructions (25 points): a. Compute the uncollectible...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT