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Exam 15: Accounts Receivable and Uncollectible Accounts

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Question 1

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When an account that was written off is later collected, the entry to reverse the write-off is recorded as a ____________________ to Accounts Receivable and the customer's account.

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Question 2

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At the end of the current year, the trial balance of Johannes' Sporting Goods Shop included the accounts and balances shown below. Credit sales were $180,000. Returns and allowances on these sales were $2,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 3 percent of accounts receivable. $\begin{array} { l r } \text { Accounts Receivable } & \$ 36,000 \mathrm { Dr } . \\\text { Allowance for Doubtful Accounts } & 1,000 \mathrm { Dr } . \\\text { Sales } & 290,000 \mathrm { Cr } . \\\text { Sales Returns and Allowances } & 4,000 \mathrm { Dr } .\end{array}$ 1. What is the balance in the Allowance for Doubtful Accounts account after the adjusting entry for the estimated loss from uncollectible accounts is posted? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

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1. $1,080;...

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Question 3

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On December 31, 2014, prior to adjustments, Accounts Receivable has a debit balance of $356,000 and the Allowance for Doubtful Accounts has a credit balance of $1,200. The firm estimates its losses from uncollectible accounts to be 4% of accounts receivable at the end of the year. The balance in the Allowance for Doubtful Accounts after the adjusting entry for the estimated losses from uncollectible accounts is

Allowance for Doubtful Accounts has a credit balance of $2,000 immediately before the write-off of a $600 account receivable. The balance of Allowance for Doubtful Accounts immediately after the write-off is

The Salinas Company uses the direct charge-off method to record uncollectible accounts. The following transactions occurred during 2013. Record the transactions on page 6 of a general journal, assuming the company also uses a Cash Receipts journal. Omit descriptions.

The adjusting entry to record estimated losses from uncollectible accounts includes a(n) ____________________ to the Allowance for Doubtful Accounts account.

At the end of the current year, the trial balance of Daniels' Furniture Store included the accounts and balances shown below. Credit sales were $180,000. Returns and allowances on these sales were $2,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. $\begin{array} { l r } \text { Accounts Receivable } & \$ 36,000 \mathrm { Dr } . \\\text { Allowance for Doubtful Accounts } & 1,000 \mathrm { Dr } . \\\text { Sales } & 290,000 \mathrm { Cr } . \\\text { Sales Returns and Allowances } & 4,000 \mathrm { Dr } .\end{array}$ 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

The experience of other firms in the same line of business may be used in estimating losses from uncollectible accounts for a new firm.

Allowance for Doubtful Accounts has a credit balance of $1,000 immediately before the write-off of a $300 account receivable. The credit balance of Allowance for Doubtful Accounts immediately after the write-off is

The allowance method may be used to record bad debt losses for income tax purposes.

The balance of the Allowance for Doubtful Accounts account is reported as

On December 31, 2013, prior to adjustments, Accounts Receivable has a debit balance of $370,000 and the Allowance for Doubtful Accounts has a credit balance of $400. The firm estimates its losses from uncollectible accounts to be 5% of accounts receivable at the end of the year. The amount of the adjusting entry needed to record the estimated losses from uncollectible accounts is

A procedure that groups accounts receivable according to the length of time they have been outstanding is called ____________________ the accounts receivable.

Which of the following statements is not correct?

On December 31, prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $400. An aging analysis of the accounts receivable produces an estimate of $2,000 of probable losses from uncollectible accounts. The adjusting entry needed to record the estimated losses from uncollectible accounts is made for

Raymond Repair Services Company uses the direct charge-off method to record uncollectible accounts. On January 15, 2014, the company learned that Caroline Smith, a customer who owed $380, had moved and left no forwarding address. Raymond concluded that no part of the debt was collectible. Prepare the general journal entry to write off the account.

After the adjusting entry is made to record the estimate of losses from uncollectible accounts, Allowance for Doubtful Accounts should have a(n) ____________________ balance.

Uncollectible Accounts Expense can be called Loss from Uncollectible Accounts.

The totals from the Kalvin Company's Schedule of Accounts Receivable by Age as of the end of the current year are shown below. $\begin{array} { l } \text { Account }&\text { Balance }&\text { Current }&{1-30}&{31-60}&\text { Over } 60 \\\hline\text { Totals } & \$ 11,800 & \$ 8,800 & \$ 1,500 & \$ 600&\$ 900\\\hline\end{array}$ As of the end of the current year, there is a debit balance of $75 in the Allowance for Doubtful Accounts. 1. Compute the estimated uncollectible accounts using the following rates. $\begin{array}{lr}\text { Current } & 1 \% \\1-30 \text { days past due } & 10 \% \\31-60 \text { days past due } & 25 \% \\\text { Over } 60 \text { days past due } & 50 \%\end{array}$ 2. Compute the amount of the adjustment for uncollectible accounts expense.

Allowance for Doubtful Accounts has a debit balance of $500 at the end of the year, before adjustments. Sales for the year amounted to $870,000, sales discounts amounted to $30,000 and sales returns and allowances amounted to $40,000. If the uncollectible accounts expense is estimated at 2% of net sales, the balance in the Allowance for Doubtful Accounts after the entry to record estimated losses from uncollectible accounts will be