Einhorn Industries believes it is not probable that Thaler Inc. will default on an account receivable, but given thepossibility of default, Einhorn believes it will collect $30,000 less than the receivable’s current carrying value onEinhorn’s balance sheet. Under current GAAP, how much impairment charge should Einhorn recognize?
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Einhorn Industries believes it is not probable that Thaler Inc. will default on an account receivable, but given the
possibility of default, Einhorn believes it will collect $30,000 less than the receivable’s current carrying value on
Einhorn’s balance sheet. Under current GAAP, how much impairment charge should Einhorn recognize?
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- Harmon, Inc. uses the aging of receivables method to account for the allowance of doubtful accounts and the recording of bad debt expense. Below is the aging of the accounts receivable along with the associated estimation of uncollectibility. a. Calculate the amount estimated to be uncollectible at the end of 2021. b. Record the year-end entry to record the bad debt expense if there was a credit balance of $12,000 in the Allowance for Doubtful Accounts at the end of 2021 before the year-end entry. c. Record the year-end entry to record the bad debt expense if there was a debit balance of $3,500 in the Allowance for Doubtful Accounts at the end of 2021 before the year-end entry. Harmon, Inc - Accounts Receivable Aging Balances - December 31, 2021 Total 1-30 Days 31-60 Days 61-90 Days 91-120 Days…One company has estimated that $3150 of its accounts receiable will be uncollectible. If allownace for doubtful accounts already has a credit balance of $1102, and the percentage of receivables method is used, it sadjustment to recrod for the period will require a debit to what for what amount?Bidiyah Co. estimates that RO 6,500 of its accounts receivable to be uncollectible. If Allowance for Doubtful Accounts has a RO 1,200 debit balance, the company should record a Select one: O a. None of the answers are correct Ob.debit to Bad Debt Expense for RO 5,300. O c redit to Allowance for Doubtful Accounts for RO 6,500. O d debit to Allowance for Doubtful Accounts for RO 5,300. O e. credit to Bad Debt Expense for RO 7,700.
- Bidiyah Co. estimates that RO 6,500 of its accounts receivable to be uncollectible. If Allowance for Doubtful Accounts has a RO 1,200 debit balance, the company should record a: Select one: O a. None of the answers are correct O b. debit to Bad Debt Expense for RO 5,300. O c credit to Allowance for Doubtful Accounts for RO 6,500. Od. debit to Allowance for Doubtful Accounts for RO 5,300. O e. credit to Bad Debt Expense for RO 7,700.idiyah Co. estimates that RO 6,500 of its accounts receivable to be uncollectible. If Allowance for Doubtful Accounts has a RO 200 debit balance, the company should record a elect one: O a. None of the answers are correct O b. debit to Bad Debt Expense for RO 5,300. O c credit to Allowance for Doubtful Accounts for RO 6,500. O d. debit to Allowance for Doubtful Accounts for RO 5,300. O e. credit to Bad Debt Expense for RO 7,700.Assume that Kingbird Company has recently fallen into financial difficulties. By reviewing all available evidence on December 31, 2025, one of Kingbird's creditors, the National American Bank, determined that Kingbird would pay back only 65% of the principal at maturity. As a result, the bank decided that the loan was impaired. If the loss is estimated to be $242,200. What entry should National American Bank make to record this loss? (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Dec. 31, 2025 Account Titles and Explanation Debit Credit
- Shimmer Products is considering which bad debt estimation method works best for its company. It is deciding between the income statement method, balance sheet method of receivables, and balance sheet aging of receivables method. If it uses the income statement method, bad debt would be estimated at 5.6% of credit sales. If it were to use the balance sheet method, it would estimate bad debt at 13.7% percent of accounts receivable. If it were to use the balance sheet aging of receivables method, it would split its receivables into three categories: 0–30 days past due at 5%, 31–90 days past due at 21%, and over 90 days past due at 30%. There is currently a zero balance, transferred from the prior years Allowance for Doubtful Accounts. The following information is available from the year-end income statement and balance sheet. There is also additional information regarding the distribution of accounts receivable by age. Prepare the year-end adjusting entry for bad debt, using A. Income statement method B. Balance sheet method of receivables C. Balance sheet aging of receivables method D. Which method should the company choose, and why?Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured, and bad debt losses cannot be reasonably predicted. It is unlikely that repossessed merchandise is in condition to be re-sold. Therefore, Reliable uses the cost recovery method. Merchandise costing $32,250 was sold for $56,500 in 2020. Collections on this sale were $20,600 in 2020, $14,700 in 2021, and $21,200 in 2022. In 2022, Reliable would recognize gross profit of:Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured, and bad debt losses cannot be reasonably predicted. It is unlikely that repossessed merchandise is in condition to be re-sold. Therefore, Reliable uses the cost recovery method. Merchandise costing $29,500 was sold for $55,500 in 2020. Collections on this sale were $20,200 in 2020, $14,100 in 2021, and $21,200 in 2022.In 2022, Reliable would recognize gross profit of: Multiple Choice $4,500. $10,500. $0. $21,200.
- Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $22,350. The account had an unadjusted credit balance of $11,300 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,300 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or - for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) Assets Allowance for Doubtful Accounts Allowance for Doubtful Accounts a. b. b. Accounts Receivable 9,250 X = 1,100 X = (1,100) X = > Answer is complete but not entirely correct. Liabilities + + + + Bad Debt Expense Stockholders' Equity 9,250 X4. At the end of its first year of operations, December 31, 2025, Swifty Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts Customer accounts written off as uncollectible during 2025 Bad debt expense for 2025 What should be the balance in accounts receivable at December 31, 2025, before subtracting the allowance for doubtful accounts? Net credit sales Accounts receivable, before deducting allowance for doubtful accounts Allowance for doubtful accounts Accounts receivable 5. The following accounts were taken from Nash Inc.'s trial balance at December 31, 2025. Debit $13,960 333,200 $872,800 O Search 26,370 Credit 89,470 $804,200 $ LOCO DELL gBlackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $22,550. The account had an unadjusted credit balance of $11,400 at that time. The appropriate bad debt adjustment was recorded. Later, an account receivable for $2,400 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or − for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.)