Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Temper Company has credit sales of $3.10 million for calendar year 2010. Temper estimates that 1% of the credit sales will not be collected.

image text in transcribed
4. Temper Company has credit sales of $3.10 million for calendar year 2010. Temper estimates that 1% of the credit sales will not be collected. On December 31, 2009, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $21,400. Temper prepares a schedule of its December 31, 2010 accounts receivable by age. During 2010, Temper identified and wrote-off bad debt of $18,400. Based on past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here: December 31, 2010 Age of Accounts Expected Percent Accounts Receivable Receivable Uncollectible S620,000 Not yet due 1,05% 248,000 1 to 30 days past due 49,600 31 to 60 days past due 6.30 24,800 61 to 90 days past due 31.75 4.960 Over 90 days past due 66.00 1.80 a. Assuming the company uses the aging of Accounts Receivable method, what is the amount that Temper will enter as the Bad Debt Expense in the December 31 adjusting journal entry? Date Accounts Dr. Cr. b. Suppose the company used the percentage of sales method to provide for doubtful debts, what record will the company make at the end of the fiscal year? Date Accounts Dr. Cr

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting In An Economic Context

Authors: Jamie Pratt

7th Edition

0470128828, 978-0470128824

More Books

Students also viewed these Accounting questions

Question

How does the source of evidence affect its reliability?

Answered: 1 week ago

Question

Do you usually feel alert when you wake up in the morning? Yes No

Answered: 1 week ago

Question

How do rules guide verbal communication?

Answered: 1 week ago