Question

The following information is for WATCHOUT Company. Accounts Receivable, January 1st $ 75,000 Allowance for Doubtful...

The following information is for WATCHOUT Company. Accounts Receivable, January 1st $ 75,000 Allowance for Doubtful Accounts, January 1st $ 8,000 Credit Sales during the year $ 600,000 Credit Sales Returns during the year $ 25,000 Accounts written off during the year $ 3,000 WATCHOUT estimates that uncollectible accounts will total 3% of accounts receivable. What is the adjusting entry WATCHOUT will make for uncollectible accounts?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Account receivable beginning 75,000
Credit sales 600,000
Credit sales return -25,000
Account receivable ending $650,000

Bad debt expense = (Account receivable ending balance x percentage estimated as uncollectible) - Existing credit balance in allowance for doubtful accounts

= 650,000 x 3% - 8,000

= 19,500 - 8,000

= $11,500

Date Account Title Debit Credit
Dec. 31 Bad debts Expense 11,500
Allowance for doubtful accounts 11,500

kindly give a positive rating if you are satisfied with the solution. Please ask if you have any query related to the question, Thanks.

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
Arwin Company revealed the following information for 2020: Accounts receivable on January 650,000 Credit sales 2,700,000...
Arwin Company revealed the following information for 2020: Accounts receivable on January 650,000 Credit sales 2,700,000 Sales returns 75,000 Collections from customers 2,150,000 Accounts written off 40,000 Estimated future sales returns at year-end 50,000 Estimated uncollectible accounts receivable at year-end per aging 110,000 On December 31, 2020, what is the balance of accounts receivable before allowance for doubtful accounts and allowance for sales returns?
On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for...
On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable $1,272,400 Allowance for Doubtful Accounts (a credit balance) 46,000 During 2019, Hungryman had $18,900,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off $60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible. Required: 1. Calculate Hungryman's preadjustment balance in accounts receivable on...
At January 1, 2023, Vy6r3 Company had accounts receivable of $220,000 and an allowance for doubtful...
At January 1, 2023, Vy6r3 Company had accounts receivable of $220,000 and an allowance for doubtful accounts with a $15,000 credit balance. During 2021, Vy6r3 Company reported the following information: Write-offs of uncollectible accounts ................ $ 39,260 Cash collections from credit customers .............. $165,210 Net credit sales .................................... $363,560 Recoveries of previously written-off accounts ....... $ 13,640 Vy6r3 Company estimates bad debt expense using the net credit sales method and has estimated that 5% of its net credit sales will...
Paul is making the annual accounts receivable and allowance for doubtful accounts adjustments at year end....
Paul is making the annual accounts receivable and allowance for doubtful accounts adjustments at year end. The proportion of uncollectible accounts is estimated during the year based on past experience which indicates 1.5% of net credit sales will be uncollectible. Total sales for the year were $2 million, of which 10% were cash transactions. Paul determines that a $10,000 account from Rent, Inc is uncollectible and will write off this account before making year-end adjustments. Below are the unadjusted account...
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried...
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $63,400 and $1,300, respectively. During Year 2, Kincaid reported $152,000 of credit sales, wrote off $1,200 of receivables as uncollectible, and collected cash from receivables amounting to $161,300. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. What effect will the entry to recognize the uncollectible accounts expense for Year 2 have on the elements of...
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried...
On January 1, Year 2, Kincaid Company's Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $31,000 and $500, respectively. During the year Kincaid reported $72,500 of credit sales. Kincaid wrote off $550 of receivables as uncollectible in Year 2. Cash collections of receivables amounted to $74,550. Kincaid estimates that it will be unable to collect one percent (1%) of credit sales. Kincaid's entry required to recognize the write off of the uncollectible accounts will: Multiple Choice Increase...
The Tanner Company provided the following information for 2019, after year-end adjustments. Allowance for doubtful accounts...
The Tanner Company provided the following information for 2019, after year-end adjustments. Allowance for doubtful accounts was $11,000 at the beginning of the year, and $30,000 at the end of the year. Accounts receivable (gross) were $80,000 at the beginning of the year, and $420,000 at the end of the year. Accounts written off as uncollectible during the year were $10,000. Sales totaled $2,700,000. Half of the sales were in cash; half were on credit. Like all temporary income statement...
Rapture Company had the following information for the current year relating to accounts receivable: Accounts receivable,...
Rapture Company had the following information for the current year relating to accounts receivable: Accounts receivable, January 1 1,300,000 Credit sales 5,400,000 Collections from customer, excluding recovery 4,750,000 Accounts written off 125,000 Collection of accounts written off in prior year, customer credit was not reestablished 25,000 Estimated uncollectible receivables per aging at December 31 165,000 What is the balance of accounts receivable, before allowance for doubtful accounts, on December 31?
A company's year-end unadjusted trial balance shows accounts receivable of $109,000, allowance for doubtful accounts of...
A company's year-end unadjusted trial balance shows accounts receivable of $109,000, allowance for doubtful accounts of $600 (credit), & sales of $325,000. Uncollectibles are estimated to be 2.5% of accounts receivable. 1. Prepare the December 31 year-end adjusting entry for uncollectible. 2. Assume the same facts as in PART A except that the company estimates uncollectible as 2.0% of sales. Prepare the December 31 year-end adjusting entry for uncollectible.
At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for...
At the end of the current year, Accounts Receivable has a balance of $550,000; Allowance for Doubtful Accounts has a credit balance of $5,500; and sales for the year total $2,500,000.  An analysis of receivables estimates uncollectible receivables as $25,000. ? 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.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT