The December 31, 2013, Unadjusted Trial Balance of Torengat Ltd

Essay

The December 31, 2013, unadjusted trial balance of Torengat Ltd contained the following balances: $$\begin{array} { l c } \text { Accounts receivable } & \$ 200,000 \\\text { Allowance for uncollectibles } & \$ 12,000 \mathrm { CR } \\\text { Net credit sales } & \$ 700,000\end{array}$$ Additionally, the firm has given up trying to collect a $9,500 receivable from a customer who recently declared bankruptcy.Torengat's management has not yet written off the amount but intends to do so before the books are closed for the year.
Required:
A) Provide the entry for the write-off.The company does not use the direct write-off method.
B) i) Provide the entry to record the bad debt expense for 2013 assuming the firm uses the percentage-of-credit sales method for recording bad debt expense.On average Torengat has experienced a 4% rate of uncollectible accounts over the past 5 years.
ii) What would be the final balances in accounts receivable and the allowance for uncollectibles accounts?
iii) At what value would accounts receivable be shown on the balance sheet?
C) i) Provide the entry to record the bad debt expense for 2013 assuming that after the firm recorded the $9,500 of write-offs, it determined that 18% of its remaining accounts receivable would be uncollectible under the aging method.
ii) What would be the final balances in accounts receivable and the allowance for uncollectibles accounts?
iii) At what value would accounts receivable be shown on the balance sheet?