Big Bowl, Inc. uses the aging method to estimate its bad debts. The information below has been collected regarding the company's outstanding customer accounts and their probability of collection: Probability of Non-Collection Account Age 0-30 days 31-60 days Amount Owed 0.5% $652,800 1.0% 205,700 61-90 days 1.5% 128,000 91-120 days 3.0% 75,500 Over 120 days 15.0% 29,000 The balance in Big Bowl's' Allowance for Uncollectible Accounts account at year end before adjusting for a bad debt estimate is $360. Calculate the following amounts for Big Bowl, Inc.: A. Expected bad debt expense B. Total balance in accounts receivable C. Net realizable value of Big Bowl's accounts receivable

Big Bowl, Inc. uses the aging method to estimate its bad debts. The information below has been collected regarding the company's outstanding customer accounts and their probability of collection: Probability of Non-Collection Account Age 0-30 days 31-60 days Amount Owed 0.5% $652,800 1.0% 205,700 61-90 days 1.5% 128,000 91-120 days 3.0% 75,500 Over 120 days 15.0% 29,000 The balance in Big Bowl's' Allowance for Uncollectible Accounts account at year end before adjusting for a bad debt estimate is $360. Calculate the following amounts for Big Bowl, Inc.: A. Expected bad debt expense B. Total balance in accounts receivable C. Net realizable value of Big Bowl's accounts receivable

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 65E: Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared...

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Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
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The following accounts receivable information pertains to Marshall Inc. Determine the estimated uncollectible bad debt from Marshall Inc. using the balance sheet aging of receivables method, and record the year-end adjusting journal entry for bad debt.
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