Exam 13: Accounting for Bad Debts

Empire has a credit balance of $750 in its Allowance for Doubtful Accounts.The balance it the Accounts Receivable account is $80,500,with $2,415 estimated to be uncollectible after aging the accounts.Under the balance sheet approach,the debit to Bad Debt Expense will be:

Mid-Iowa Internet Service uses the direct write-off method for recording bad debts.Journalize the following transactions for Mid-Iowa: 2010 Mar. 13 Wrote off Pat's account for $\$ 350$ Apr. 17 Wrote off Cole's account for $\$ 75$ Jul. 5 Recovered $\$ 50$ from Cole 2011 Jan. 9 Recovered $\$ 200$ from Pat

The general ledger controlling account for Accounts Receivable shows a debit balance of $120,000.The Allowance for Doubtful Accounts has a credit balance of $5,000.An aging report of accounts receivable accounts resulted in an estimate of $23,000 of uncollectible accounts receivable.Calculate the amount of the adjustment using the balance sheet approach. Amount of the adjustment ________

Using the aging method,estimated uncollectible accounts are $3,000.If the balance in the Allowance for Doubtful Accounts is a $600 credit before adjustment,what is the Bad Debts Expense adjustment for the period?

The adjustment for bad debts using the percentage of receivables ignored the credit balance in the Allowance account.This error would cause:

After the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $540,000 and Allowance for Doubtful Accounts has a normal balance of $25,000.What is the net realizable value of the Accounts Receivable?

A debit balance in Allowance for Doubtful Accounts indicates the estimate for Bad Debts was too high.

Before the accounts are adjusted and closed at the end of the year,Accounts Receivable has a normal balance of $200,000 and Allowance for Doubtful Accounts has a debit balance $20,000.What is the net realizable value of the accounts receivable?

Net Realizable Value can be defined as:

Which account is classified as a contra-asset?

If a recovery of a written-off account is made in the same year using the allowance method,the Bad Debts Recovered account would be used.

Using the aging method,estimated uncollectible accounts are $5,000.If the balance of Allowance for Doubtful Accounts is $1,500 credit before adjustment,what is a Bad Debt Expense for the period?

For each of the following, identify in column 1 the category to which the account belongs, in column 2 the normal balance for the account, in column 3 the financial statement that the account in which the account balance is reported, and in column 4 the account's nature. - Column 1 Column 2 Column 3 Column 4 Bad debts expense

Indy Sport and Hobby's Allowance for Doubtful Accounts had an unadjusted credit balance of $400.The manager estimates that $900 of the Accounts Receivable is uncollectible.Using the balance sheet approach,the year-end adjusting entry for Bad Debts Expense:

As the past due time increases for an account,the likelihood of collecting that account:

On December 31,2010,Paint Pros had a balance in Accounts Receivable of $15,000.Net credit sales for the year were $450,000.The Allowance for Doubtful Accounts has a debit balance of $800.Journalize the recording of the bad debt expense under the income statement approach if 0.8% of net credit sales is deemed uncollectible.

Sigma reports net credit sales of $400,000.There is a credit balance of $1,000 in the Allowance for Doubtful Accounts.Uncollectible accounts are estimated to be 2.5% of net credit sales.Under the income statement approach,the adjusting entry would require a debit to Bad Debt Expense for:

If the direct write-off method of accounting for uncollectible receivables is used,what general ledger account is credited to write off a customer's account as uncollectible?

Myra's balance of Accounts Receivable is $4,000.The balance of the Allowance account is $600 credit.Myra writes off a $150 uncollectible account.The effect on net realizable value of the receivables is that it:

Prepare the adjusting journal entry for Bad Debts Expense from the following information using the balance sheet approach. Net Sales for the year \2 50,000 Balance in the allowance account 250 credit Estimated percentage of sales uncollectible 1\% Estimated uncollectible accounts-aging \3 ,000