An aging analysis of Reiko Limited's accounts receivable at December 31, 2012 and 2011 showed the following:
Question:
An aging analysis of Reiko Limited's accounts receivable at December 31, 2012 and 2011 showed the following:
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1. At December 31, 2011, the unadjusted balance in Allowance for Doubtful Accounts was a credit of $3,000.
2. In 2012, $28,000 of accounts were written off as uncollectible and $3,000 of accounts previously written off were recovered.
Instructions
(a) Prepare an aging schedule to calculate the estimated uncollectible accounts at December 31, 2011 and 2012. Comment on the results.
(b) Record the adjusting entry relating to bad debts on December 31, 2011.
(c) Record the write-off of uncollectible accounts in 2012.
(d) Record the collection of accounts previously written off in 2012.
(e) Prepare the adjusting entry relating to bad debts on December 31, 2012.
(f) Calculate the net realizable value of Reiko accounts receivable at December 31, 2011 and 2012.
(g) Do you think that Reiko was conservative when estimating its bad debts expense? Explain.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...
Step by Step Answer:
a Total estimated allowance balance 2011 Number of Days Outstanding Total 030 3160 6190 Over 90 Accounts receivable 380000 220000 86000 52000 22000 un...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
