Since it started its operations in 2019, Valdo Co. carried no allowance for doubtful accounts.Uncollectible receivables were expensed as written off and recoveries were credited toincome as collected. On March 1, 2023(after the financial statements were issued),management recognized that Valdo accounting policy with respect to doubtful accounts wasnot correct, and determined that an allowance for doubtful accounts was necessary.Data for the five years follow:20192020202120222023Credit sales2,100,0001,850,0002,050,0002,000,0002,000,000Accounts written off20,00040,000130,00022,000113,000The year-end balance of accounts receivable are as follows:December 31, 2022 - P1,000,000December 31, 2023 P1,200,000Recoveries15,00020,0005,00020,00040,000Bad debts are provided for as a percentage of sales.a) The percentage to be used to compute for the allowance for bad debts onDecember 31, 2023 would beb) How much would be the doubtful accounts expense for 2023?c) If the allowance for doubtful accounts on January 1, 2023 is P400,000, howmuch is the allowance for doubtful accounts December 31, 2023?

As the name suggest, doubtful debt refers to debt that is unlikely to be repaid. Bad debt,…

Answered: Since it started

Business

Accounting

Since it started

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

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 6MC: Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts...

See similar textbooks

Similar questions

Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts Receivable and the related Allowance for Doubtful Accounts were 1,200,000 and 60,000, respectively. An aging of accounts receivable indicated that 106,000 of the December 31, 2019, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2019, was: a. 1,034,000 b. 1,094,000 c. 1,140,000 d. 1,154,000
It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
On December 31, 2021, the Allowance for Doubtful Accounts has an unadjusted debit balance of $960. Lawn Corporation estimates that 10% of its total accounts receivable balance of $83.900 will become uncollectible and records the necessary adjustment to the Allowance for Doubtful Accounts. On May 11, 2022, Lawn Corporation determined a J. Reno's account was uncollectible and wrote off $1.540. On June 12, 2022, Reno paid the amount previously written off. Prepare the journal entries on December 31, 2021. May 11, 2022, and June 12, 2022. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Dec. 31/21 P > Account Titles and Explanation Accounts Receivable A (To reverse write-off of account receivable) (To record recovery of uncollectible amount) Debit Credit
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,534, Indigo Corporation estimates that 8% of its accounts receivable balance of $74,108 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Indigo Corporation determined that B. Jared's account was uncollectible and wrote off $1,171. On June 12, 2022, Jared paid the amount previously written off. Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation (To reinstate account previously written off) Debit Credit
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,371, Tamarisk, Inc. estimates that 8% of its accounts receivable balance of $77,800 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Tamarisk, Inc. determined that B. Jared’s account was uncollectible and wrote off $1,135. On June 12, 2022, Jared paid the amount previously written off.Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Choose a transaction date December 31, 2021May 11, 2022June 12, 2022 Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount…
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,366, Shamrock, Inc. estimates that 9% of its accounts receivable balance of $107,900 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Shamrock, Inc. determined that B. Jared’s account was uncollectible and wrote off $1,212. On June 12, 2022, Jared paid the amount previously written off.Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Choose a transaction date December 31, 2021May 11, 2022June 12, 2022 Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount…
Oceanside Company uses the balance sheet approach in estimating uncollectible accounts expense. It has just completed an aging analysis of accounts receivable at December 31, 2019. This analysis disclosed the following information: Age Group Total Percentage Considered Uncollectible Not Yet Due 1 - 30 days past due $52,000 $32,000 $13,000 1% 2% 8% 31 - 60 days past due What is the appropriate balance for Oceanside's Allowance for Impairment at December 31, 2019 O A. $1,560 O B. $2,160 O C, 2% of credit sales in 2019 O D. $95,000
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,293, Pharoah Company estimates that 8% of its accounts receivable balance of $88,900 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Pharoah Company determined that B. Jared’s account was uncollectible and wrote off $1,166. On June 12, 2022, Jared paid the amount previously written off.Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,521, Sheridan Company estimates that 9% of its accounts receivable balance of $105,300 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Sheridan Company determined that B. Jared’s account was uncollectible and wrote off $1,165. On June 12, 2022, Jared paid the amount previously written off.Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
What is the allowance for doubtful accounts on December 31, 2020? From inception of operations, Axis Company carried no allowance for doubtful accounts. Uncollectible accounts were expensed as written off and recoveries were credited to income as collected. During 2020, management recognized that the accounting policy with respect to doubtful accounts was not correct and determined that an allowance for doubtful accounts was necessary. A policy was established to maintain an allowance for doubtful accounts based on historical bad debts loss percentage applied to year-end accounts receivable. The historical bad debt loss percentage is to be recomputed each year based on all available past years up to a maximum of five years. Year Credit sales Writeoffs Recoveries 1,500,000 2,250,000 2,950,000 2016 15,000 38,000 52,000 2017 2,700 2,500 2018 3,300,000 4,000,000 65,000 83,000 2019 4,800 5,0 2020 The entity reported accounts receivable of P1,250,000 on December 31, 2019 and P2,000,000 on…
On December 31, 2021, when its Allowance for Doubtful Accounts had a debit balance of $1,500, Skysong, Inc. estimates that 8% of its accounts receivable balance of $85,000 will become uncollectible and records the necessary adjustment to Allowance for Doubtful Accounts. On May 11, 2022, Skysong, Inc. determined that B. Jared's account was uncollectible and wrote off $1,100. On June 12, 2022, Jared paid the amount previously written off. Prepare the journal entries on December 31, 2021, May 11, 2022, and June 12, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit (To reverse write-off) (To record collection of write-off) >
Lemon company uses the balance sheet/aging approach to estimate uncollectible accounts receivable. Based upon recent collection history, Lemon's accountant has prepared an aging of accounts receivable as of December 31, 2019, and has estimated uncollectible accounts receivable of S81,250 as of that date -ie ending balance of Allowance for Doubtful Accounts (ADA). Additional facts needed for questions 1 and 2 below - The balance in the allowance for doubtful accounts (ADA) on January 1, 2019 (beg. balance) was $38,500. · Accounts written off during 2019 amounted to $3,500 Instructions 1. Prepare the entry to record the write off of $3,500 during 2019 2. Prepare the adjusting entry to record the uncollectible accounts expense for 2019 (considering that the ending balance in ADA is $81,250 as mentioned above). 3. Determine the net accounts receivable (net realizable value) that will appear on Lemon's 12/31/19 balance sheet (statement of financial position), if the (gross) accounts…