Mary Pierce Corporation operates in an industry that has a high rate of bad debts. Before any
Question:
Mary Pierce Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Pierce's Accounts Receivable account was $555,000 and the Allowance for Doubtful Accounts had a credit balance of $35,000. The year-end balance reported in the balance sheet for the Allowance for Doubtful Accounts will be based on the aging schedule shown below.
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Instructions
(a) What is the appropriate balance for the Allowance for Doubtful Accounts at year-end?
(b) Show how accounts receivable would be presented on the balance sheet.
(c) What is the dollar effect of the year-end bad debt adjustment on the before-tax income?
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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a The Allowance for Doubtful Accounts should have a balance of 50000 at yearend The supporting calcu...View the full answer
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
