Question
AN AGING OF SMITH COMPANY'S ACCOUNT RECEIVABLE ON DECEMBER 31, 2019 REVEALS THE FOLLOWING INFORMATION: AMOUNT OF DAYS OUTSTANDING ACCOUNT RECEIVABLE CURRENT 450,000.00 30-60 DAYS
AN AGING OF SMITH COMPANY'S ACCOUNT RECEIVABLE ON DECEMBER 31, 2019 REVEALS THE FOLLOWING INFORMATION: AMOUNT OF DAYS OUTSTANDING ACCOUNT RECEIVABLE CURRENT 450,000.00 30-60 DAYS 360,000.00 61-90 DAYS 125,000.00 30,000.00 10,000.00 91-120 DAYS OVER 120 DAYS BASED ON THE PAST EXPERIENCE, THE COMPANY BELIVES THAT THE FOLLOWING UNCOLLECTIBLE PERCENTAGE ARE APPROPRIATE: CURRENT 30-60 DAYS 61-90 DAYS 91-120 DAYS OVER 120 DAYS 1.50% 2.50% 5.00% 8.00% 20.00% 1. MARCH 15, 2019 RECEIVED 29% OF THE $ 30,000.00 BALANCE OWED BY L&M COMPANY, A BANKRUPT BUSINESS AND WROTE OFF THE REMINDER AS UNCOLLECTIBLE. JOURNALIZED WRITE OFF. 2. SEPTEMBER 30, 2019 REINSTATED THE ACCOUNT OF R&M COMPANY, WHICH HAD BEEN WRITTEN OFF IN THE PREVIOUS YEAR AS UNCOLLECTIBLE. JOURNALIZED THE RECEIPTS OF 7, 590.00 CASH IN FULL PAYMENT OF R&M'S ACCOUNT. 3: USING THE AGING OF ACCOUNT RECEIVABLE, PREPARE THE ADJUSTING ENTRY ON DECEMBER 31, 2019 TO RECORD RECORD ESTIMATED BAD DEBTS,ASSUNING THAT THE BALANCE OF ALLOWANCE FOR DOBTFUL ACCOUNT AS OF DECEMBER 31, 2018 WAS 12,000.00 4. PREPARE ADJUSTING JOURNAL ENTRY FOR BAD DEBT EXPENSEFOR 2019 BASED ON 1.50% OF THE NET SALES $2,000,000. 5. DETERMINE THE NET REALIZABLE VALLUE OF ACCOUNT RECEIVABLE AS OF DECEMBER 31, 2019 UNDER BOTH METHOD
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