Accounting Questions (6 & 7)

Question 6: Refer to explanation to answer Accounting Question 6.png

Explanation: At January 1, 2020, the credit balance ofConcord Corporation's Allowance for Doubtful Accounts was $409,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $79million, of which90% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be0.80% of net credit sales. During 2020, uncollectible receivables amounting to $487,000were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $520,000.

List of Accounts

• Accounts Payable
• Accounts Receivable
• Accrued Liabilities
• Accumulated Depreciation - Equipment
• Advances to Employees
• Advertising Expense
• Allowance for Doubtful Accounts
• Allowance for Sales Returns and Allowances
• Bad Debt Expense
• Bank Charges Expense
• Cash
• Cash Over and Short
• Due from Factor
• Entertainment Expense
• Equipment
• Finance Expense
• Finance Revenue
• Freight in
• Freight out
• Gain on Disposal of Equipment
• Gain on Disposal of Land
• Interest Expense
• Interest Income
• Interest Receivable
• Inventory
• Land
• Loss on Disposal of Equipment
• Loss on Disposal of Land
• Loss on Disposal of Receivables
• Loss on Impairment
• Miscellaneous Expense
• No Entry
• Notes Payable
• Notes Receivable
• Office Expense
• Petty Cash
• Postage Expense
• Prepaid Expenses
• Purchase Discounts
• Recourse Liability
• Refund Liability
• Rent Expense
• Sales Discounts
• Sales Discounts Forfeited
• Sales Returns and Allowances
• Sales Revenue
• Servicing Liability
• Service Revenue
• Supplies
• Supplies Expense
• Unearned Revenue

Prepare a schedule calculating the balance in Concord Corporation's Allowance for Doubtful Accounts at December 31, 2020. Balance, January 1, 2020 Bad debt expense accrual Uncollectible receivables written off Balance, December 31, 2020 before adjustment Allowance adjustment Balance, December 31, 2020 $ Prepare any necessary journal entry at year end to adjust the allowance for doubtful accounts to the required balance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit CreditThe following information was taken from the accounts receivable records of Sarasota Corporation as at December 31, 2020: Outstanding Percentage Estimated Balance to be Uncollectible 0 - 30 days outstanding $160,000 0.5% 31 - 60 days outstanding 66,000 2.5% 61 - 90 days outstanding 40,200 4.0% 91 - 120 days outstanding 20,600 6.5% Over 120 days outstanding 5,600 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,200 prior to the adjustment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $3,880 prior to the adjustment. (Round answers to O decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit