A review of the company's provision for uncollectible accounts during 2023 resulted in a determination that 1.5% of sales is the appropriate amount of loss on impairment to be charged to operations, rather than the 2% used for the preceding two years. Loss on impairment recognized in 2022 and 2021 was $33,200 and $15,300, respectively. The company would have recorded $18,000 of loss on impairment under the old rate for 2023. No entry has yet been made in 2023 for loss on impairment

A review of the company's provision for uncollectible accounts during 2023 resulted in a determination that 1.5% of sales is the appropriate amount of loss on impairment to be charged to operations, rather than the 2% used for the preceding two years. Loss on impairment recognized in 2022 and 2021 was $33,200 and $15,300, respectively. The company would have recorded $18,000 of loss on impairment under the old rate for 2023. No entry has yet been made in 2023 for loss on impairment

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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The company had sales of $100,000 for the calendrer period 2021. The allowance for doubtful accounts total at the beginning of the year was $1500. $ 1800 of accounts receivable were written off during the year as uncollectible. Assuming the company estimates the allowance for bad debts to be 2% of sales, what is the year end adjusting entry? Would your answer be different if the company utilized the direct write off method? If so, how?
ABC Company has an outstanding receivable of P1,000,000 as of December 31, 2020. A test of collectability of the receivable showed that P700,000 is currently collectible and not impaired; P300,000 has been outstanding more than the required period for similar transaction and objective evidence showed that only P150,000 is considered realizable; the remaining receivable balance has been outstanding for 2 years and the company estimates that none of which will be realized. What amount should the account receivable is reported in the December 31, 2020 balance sheet? A. P700,000 B. P850,000 C. P800,000 D. P758,000
johnson company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. The allowance for uncollectable accounts had a credit balance of $12000 at the begining of 2024. no previously written off accounts recievable were reinstated during 2024. at 12/31/2024, gross accounts recievable totaled $200,100, and prior to recording the adjusting entry to recognize bad debt expenses for 2024, the allowance for uncollectable accounts had a debit balance of $22000. required 1. what was the balance in gross accounts recievable as of 12/31/2023? 2. what journal entry should johnson record to recognize bad debt expense for 2024? 3. assume johnson made no other adjustments of the allowance for uncollectable accounts during 2024. Determine the amount of accounts recievable written off during 2024. 4. if johnson instead used the direct write off method, what would bad debt expense be for 2024?
Accounting Gowns, Inc. uses 'the percentage of receivables' basis to estimate its impairment loss. At December 31, 2020, per the accounts receivable aging report, Gowns estimates total uncollectible amounts in the future as $5,500. The beginning balance of allowance for impairment is $1,300. The accounts receivable balance at December 31, 2020 is $100,000. What is the amount of impairment loss for the year? Select one: $4,200 $5,500 $6,800 $1,300
At January 1, 2023, the credit balance of Ayayal Corp's Allowance for Expected Credit Losses was $408,500. During 2023, the loss on impairment entry was based on a percentage of net credit sales. Net sales for 2023 were $79 million, of which 89% were on account. Based on the information available at the time, the 2023 loss on impairment was estimated to be 0.80% of net credit sales. During 2023, uncollectible receivables amounting to $486,000 were written off against the allowance for expected credit losses. The company has estimated that at December 31, 2023, based on a review of the aged accounts receivable, the allowance for expected credit losses would be properly measured at $534,500.
From inception of operations, Comprehensive Company provided for uncollectible accounts expense under the allowance method using the percentage of sales method. No year-end adjustments to the allowance account were made. The balance in the allowance for doubtful accounts was P1,000,000 on January 1, 2020. During the current year, credit sales totaled P20,000,000 interim provisions for doubtful accounts were made at 2% of credit sales, bad debts of P200,000 were written off, and recoveries of accounts previously written off amounted to P50,000. An aging on accounts receivable was made for the first tIme on December 31, 2020. Aging Balance Uncollectible 0 - 60 6,000,000 10% 61 - 180 2,000,000 20% 181 - 360 1,500,000 30% Over 360 500,000 50% Based on the review of collectibility of the account balances in the “over 360 days” aging category, additional accounts totaling P100,000 are to be written off on december 31, 2020. Effective with the year ended December 31,…
Keegan Corporation’s accounting records disclosed the following information for 2019: Cash sales $850,000 Net credit sales 720,000 Accounts receivable (12/31/2019) 160,000 Allowance for doubtful accounts (12/31/2019, prior to adjustment) 1,500 (debit) Keegan wishes to examine the effect of various alternative bad debt estimation policies. Required: 1. Prepare the adjusting entry that would be required under each of the following methods: a. Bad debts are estimated at 3% of net credit sales. b. Bad debts are estimated at 7.5% of gross accounts receivable. c. An aging of accounts receivable indicates that half of the outstanding accounts will incur a 3% loss, a quarter will incur a 6% loss, the remaining quarter will incur a 20% loss. 2. Next Level Discuss the difference between the income statement and balance sheet approaches to estimating bad debts.
From inceptions of operations, an entity provided for doubtful accounts under the allowance method and provisions were made monthly at 2% of credit sales. No year-end adjustments to the allowance account were made. The balance in the allowance for doubtful accounts was 1,000,000 on January 1, 2019. During 2019, credit sales totaled P20,000,000 interim provisions for doubtful accounts were made at 2% of credit sales, P200,000 of bad debts were written off, and recoveries of accounts previously written off amounted to P50,000. An aging was made on December 31, 2019. Balance Uncollectible Classification November — December 6,000,000 10% July — October 2,000,000 20% January—June 1,500,000 30% Prior to January 1, 2019 500,000 50% Based on the review of collectability of the account balances in the "prior to January 1, 2019" aging category, additional accounts totaling P100,000 are to be written off on December 31, 2019. Effective December 31, 2019, the entity adopted aging method for…
On December 31, 2021, Chel Company had an unadjusted credit balance of P10,000 in its allowance for expected credit loss account. An analysis of Chel Company's trade accounts receivable at that date revealed the following:Age Amount Est. Uncollectible1-30 da 600,000 5%31-60 da 40,000 10%over 60 da 20,000 14,000How much is the impairment loss (Uncollectible Accounts Expense) for the period ended December 31, 2021?
Accounts Receivable Sheridan Company reinstatement of partial accounts receivable for amounts previously written off and now determined to be collectible: Account Titles and Explanation (b) Accounts Receivable Allowance for Doubtful Accounts eTextbook and Media List of Accounts Net Realizable Value Book Value eTextbook and Media List of Accounts Save for Later What is the estimated net realizable value of Blue's accounts receivable before and after the entries above? What is the book value of Blue's accounts receivable before and after the entries above? $ $ Before Adjustments $ Debit $ 9600 After Adjustments 19100 Credit 9600 Attempts: 3 of 3 used Attempts: 0 of 3 used Submit Answer
Presented below are three independent situations.1. Novak Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Novak’s past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Novak’s liability for stamp redemptions was $14,086,200 at December 31, 2019. Additional information for 2020 is as follows. Stamp service revenue from stamps sold to licensees $8,609,200 Cost of redemptions (stamps sold prior to 1/1/20) 5,666,400 If all the stamps sold in 2020 were presented for redemption in 2021, the redemption cost would be $5,420,400. What amount should Novak report as a liability for stamp redemptions at December 31, 2020? Liability for stamp redemptions at December 31, 2020 $ 2. In packages of its products, Splish Inc. includes coupons that may be presented at retail stores to obtain discounts on other Splish products. Retailers are reimbursed for the face…