Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 5, Problem 5.32BE
LO 5
(Learning Objective 5: Apply GAAP to uncollectible receivables) At December 31, 2018, before any year-end adjustments, the Accounts Receivable balance of Hampton Company, Inc., is $330,000. The Allowance for Uncollectible Accounts has a $15,400 credit balance. Hampton prepares the following aging schedule for Accounts Receivable:
Requirements
1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowance account adequate? Too high? Too low?
2. Make the entry required by the aging schedule. Prepare a T-account for the allowance.
3. Show how Hampton will report Accounts Receivable on its December 31
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objective 5: Apply GAAP to uncollectible receivables) At December 31,2018, before any year-end adjustments, the Accounts Receivable balance of HamptonCompany, Inc., is $330,000. The Allowance for Uncollectible Accounts has a $15,400 creditbalance. Hampton prepares the following aging schedule for Accounts Receivable:Age of AccountsTotal Balance 1–30 Days 31–60 Days 61–90 Days Over 90 Days$330,000 $100,000 $70,000 $30,000Estimated uncollectible 0.6% 3.0% 5.0%$130,00040.0%Requirements1. Based on the aging of Accounts Receivable, is the unadjusted balance of the allowanceaccount adequate? Too high? Too low?2. Make the entry required by the aging schedule. Prepare a T-account for the allowance.3. Show how Hampton will report Accounts Receivable on its December 31 balance sheet.
Ace Company uses the Aging of receivables method to account for uncollectible
accounts. The company had the following balances on January 01, 2019.
Part A
Accounts receivable..
.$2,800,000
Allowance for uncollectible accounts... .
.$88,800 (credit)
The company completed the following transactions during 2019.
• April 20- Wrote off the balance of $1,000 from Shari Wickham's account as
uncollectible.
• November 27 Re-instated the account of Louis Benn and recorded the
collection of $1,500 as payment in full for her account which had been
written off earlier.
• December 31st-
i. Recorded the uncollectible account expense based on the aging
schedule. The schedule showed that $124,500 of accounts receivable
was estimated as uncollectible.
ii. Made the closing entry for the uncollectible expense account.
Requirements:
1. Prepare journal entries for each transaction (No narrations required)
2. Prepare the Allowance for Uncollectible and the Accounts Receivable
accounts based on the…
Critique Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019. Part A Accounts receivable.. .$2,800,000 Allowance for uncollectible accounts... . .$88,800 (credit) The company completed the following transactions during 2019. • April 20- Wrote off the balance of $1,000 from Shari Wickham's account as uncollectible. • November 27 Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier. • December 31st- i. Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible. ii. Made the closing entry for the uncollectible expense account. Requirements: 1. Prepare journal entries for each transaction (No narrations required) 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the…
Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 5 - A doctor for the Benson Family Practice performs a...Ch. 5 - On March 15, Maxwell Plush sold and shipped...Ch. 5 - Prob. 3QCCh. 5 - What is the financial impact on a company when a...Ch. 5 - Prob. 5QCCh. 5 - Which of the following statements is true? a....Ch. 5 - Duncan Corporation began 2018 with a balance in...Ch. 5 - Use the following information to answer questions...Ch. 5 - Jackson Company had the following information in...Ch. 5 - If uncollectible accounts are determined by the...
Ch. 5 - Refer to Question 10. Using the...Ch. 5 - Refer to Question 10. Using the...Ch. 5 - Accounts Receivable has a debit balance of 2,500,...Ch. 5 - Swan Corporation received a four-month, 8%, 1,650...Ch. 5 - What is the maturity value of a 30,000, 12%,...Ch. 5 - If the adjusting entry to accrue interest on a...Ch. 5 - Net credit sales total 1,264,800. Beginning and...Ch. 5 - From the following list of accounts, calculate the...Ch. 5 - Prob. 5.1ECCh. 5 - LO 1 (Learning Objective 1: Apply GAAP for proper...Ch. 5 - LO 1 (Learning Objective 1: Record a credit card...Ch. 5 - LO 1, 2 (Learning Objectives 1, 2: Apply GAAP for...Ch. 5 - Prob. 5.4SCh. 5 - (Learning Objective 3: Account for sales...Ch. 5 - (Learning Objective 4: Account for accounts...Ch. 5 - LO 5 (Learning Objective 5: Evaluate...Ch. 5 - LO 5 (Learning Objective 5: Evaluate...Ch. 5 - LO 6 (Learning Objective 6: Account for notes...Ch. 5 - LO 6 (Learning Objective 6: Account for notes...Ch. 5 - Prob. 5.11SCh. 5 - LO 7 (Learning Objective 7: Evaluate liquidity...Ch. 5 - LO 1, 2 (Learning Objectives 1, 2: Apply GAAP for...Ch. 5 - Prob. 5.14AECh. 5 - Prob. 5.15AECh. 5 - LO 1, 2, 3 (Learning Objectives 1, 2, 3: Apply...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5; Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP for...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 6 (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.23AECh. 5 - Prob. 5.24AECh. 5 - Prob. 5.25BECh. 5 - Prob. 5.26BECh. 5 - Prob. 5.27BECh. 5 - LO 1, 2, 3 (Learning Objectives 1, 2, 3: Apply...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP for...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 6 (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.35BECh. 5 - Prob. 5.36BECh. 5 - Fairmont Company has shipped goods to Willowbook...Ch. 5 - Prob. 5.38QCh. 5 - Prob. 5.39QCh. 5 - On April 3, a customer returned 600 of merchandise...Ch. 5 - Maple Grove Legal Association performs legal...Ch. 5 - Under the allowance method for uncollectible...Ch. 5 - Prob. 5.43QCh. 5 - Refer to Q5-43. The net receivables on the balance...Ch. 5 - Prob. 5.45QCh. 5 - Prob. 5.46QCh. 5 - Prob. 5.47QCh. 5 - Questions 5-48 through 5-51 use the following...Ch. 5 - Prob. 5.49QCh. 5 - Prob. 5.50QCh. 5 - Prob. 5.51QCh. 5 - Prob. 5.52QCh. 5 - A company with net credit sales of 960,000,...Ch. 5 - A company sells on credit terms of 2/10, n/30 and...Ch. 5 - (Learning Objectives 1, 2: Apply GAAP for proper...Ch. 5 - (Learning Objectives 1, 3: Apply GAAP for proper...Ch. 5 - (Learning Objectives 1, 4, 5, 6: Apply GAAP for...Ch. 5 - (Learning Objective 5: Apply GAAP for...Ch. 5 - (Learning Objectives 5, 7: Apply GAAP for...Ch. 5 - (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.61APCh. 5 - (Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for...Ch. 5 - (Learning Objectives 1, 2: Apply GAAP for proper...Ch. 5 - Prob. 5.64BPCh. 5 - Prob. 5.65BPCh. 5 - (Learning Objective 5: Apply GAAP for...Ch. 5 - Prob. 5.67BPCh. 5 - Prob. 5.68BPCh. 5 - (Learning Objectives 1, 7: Show how to speed up...Ch. 5 - (Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for...Ch. 5 - Prob. 5.71CEPCh. 5 - Prob. 5.72CEPCh. 5 - Prob. 5.73CEPCh. 5 - Prob. 5.74SCCh. 5 - Prob. 5.75DCCh. 5 - Prob. 5.76DCCh. 5 - Strasburg Loan Company is in the consumer loan...Ch. 5 - Prob. 1FFCh. 5 - Focus on Analysis Under Armour, Inc. LO 1, 4, 7...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The beginning balance in the Allowance for Uncollectible Accounts account is a $3,500 credit. After conducting an aging analysis, management has determined that $4,700 of accounts receivable will be uncollectible. What was the Uncollectible Accounts Expense for the year? $8,200 $3,500 $4,700 $1,200arrow_forwardQuestion 1. Accounts Recievable has a debit balance of $3,400, and the allowance for uncollectiable accounts has a credit balance of $550. A $150 accounts recievable is written off. Early the following year, Kolker wrote off $200 of old recievables as uncollectiable. The balance in the Allowance account is now: _________? Please show steps.arrow_forward(Learning Objectives 1, 4, 5, 6: Apply GAAP for revenue, receivables, collections,and uncollectibles using the percent-of-sales method; account for notes receivable) LincolnDelivery Corporation is an overnight shipper. Since it sells on credit, the company cannotexpect to collect 100% of its accounts receivable. At December 31, 2018, and 2019,respectively, Lincoln reported the following on its balance sheet (in millions of dollars):December 31,2019 2018Accounts receivable.................................................. $4,300 $3,900Less: Allowance for uncollectible accounts...............Accounts receivable, net........................................... $4,110 $3,690(190) (210)During the year ended December 31, 2019, Lincoln earned service revenue and collected cashfrom customers. Assume uncollectible-account expense for the year was 3% of service revenueon account and that Lincoln wrote off uncollectible receivables and made other adjustmentsas necessary (see below). At year-end,…arrow_forward
- The beginning balance in the Allowance for Uncollectible Accounts account is a $3,500 debit. After conducting an aging analysis, management has determined that $4,700 of accounts receivable will be uncollectible. What was the Uncollectible Accounts Expense for the year? $3,500 $8,200 $4,700 $1,200arrow_forwardThe question is asked on top of the first image. I have attached the aging analysis below. Thanks in advance :) Age of Accounts Balance December 31, 2020 Estimated % Uncollectible Estimated Amount Uncollectible Current 187,616 2% 1–30 days past due 125,705 5% 31–90 days past due 35,345 10% Over 90 days past due 30,290 25% Total Accounts Receivable $ 378,956arrow_forward3) On December 31, 2020, James Company has an accounts receivable balance of $324,000 before any 3) year-end adjustments. The Allowance for Doubtful Accounts has a $1,100 credit balance. The company prepares the following aging schedule for accounts receivable: Total Balance 1-30 days 31-60 days 61-90 days over 90 days $157,000 $324,000 $89,000 $51,000 $27,000 Percent uncollectible 1% 2% 4% 21% What is the Uncollectible-Account Expense at December 31, 2020 A) $9,960 B) $11,060 C) $12,160 D) $1,570arrow_forward
- On December 31, 2020, Extreme Fitness has adjusted balances of $960,000 in Accounts Receivable and $87,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $26,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020?arrow_forwardOn December 31, 2020, Extreme Fitness has adjusted balances of $1,000,000 in Accounts Receivable and $95,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $30,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020? Complete this question by entering your answers in the tabs below. Req A Req B Req C1 Check my work Req C2 What amount would the company report as its net accounts receivable on December 31, 2020? Net Accounts Receivablearrow_forwardAce Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019. Accounts receivable $2,800,000 Allowance for uncollectible accounts $88,800 (credit) The company completed the following transactions during 2019. Wrote off the balance of $1,000 from Shari Wickham’s account as uncollectible on April 20 Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier on November 27 On December 31st, Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible and made the closing entry for the uncollectible expense account. Requirements: 1. Prepare journal entries for each transaction (No narrations required) 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information…arrow_forward
- 5. AA Company prepared an aging of its accounts receivable at December 31, 2022 and determined that the net realizable value of the receivables was P350,000. Additional information is available as follows: Allowance for uncollectible accounts at 1/1/22 – credit balance,P34,000 Accounts written off as uncollectible during 2022, P23,000 Accounts receivable at 12/31/22, P375,000 Uncollectible accounts recovered during 2022, P5,000 Total provisions made during 2022, P12,000 Statement 1: The amount of bad debts expense in 2022 is P9,000. Statement 2: The ending balance of the allowance for uncollectible accounts is P25,000. Group of answer choices Only statement 1 is true Both statements are true Only statement 2 is true Both statements are falsearrow_forwardAl Hajar Co. provides you the following account balances for the year ended on 31 December 2019. Sales Revenue OMR 100,000 Cr. Accounts Receivable OMR 25,000 Dr. Allowance for Doubtful accounts OMR 1000 Cr. Scenario 1 Bad debts are estimated based on the aging schedule given below Aging class Receivable Balance (OMR) Estimate % of uncollectible 0–30 days 15,000 10 31–60 days 5,000 15 61–90 days 3,500 20 Over 90 days 1,500 25 Actual bad debt - OMR 1,100 and amount recovered - OMR 800. Scenario 2 Estimated amount of bad debts - 12% of receivables, Actual bad debt - OMR 1,500 and amount recovered later on - OMR 900. Scenario 3 Estimated amount of bad debts - 3.5% of Sales, Actual bad debt - OMR 1,300 and amount recovered - OMR 1000. Required: For each scenario given above; a)Estimate the uncollectible amounts. b)Pass adjusting entry to record the estimated uncollectible. c)Pass all the journal entries for actual write off and recovery…arrow_forwardRecord the following transactions for Concord Co. in the general journal. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 2020 May 1 Received a $33,000, 12 months, 10% note in exchange for Mark Chamber’s outstanding accounts receivable. Dec. 31 Accrued interest on the Chamber note. Dec. 31 Closed the interest revenue account. 2021 May 1 Received principal plus interest on the Chamber note. (No interest has been accrued in 2021.) Date Account Titles and Explanation Debit Credit May 1, 2020Dec. 31, 2020May 1, 2021 May 1, 2020Dec. 31, 2020May 1, 2021 (To record accrued interest on note.) May 1, 2020Dec. 31, 2020May 1, 2021 (To close the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License