Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An analysis of Capitol Corp. shows the following data available as of December 31, 2021 from the company's unadjusted trial balance: Allowance for Doubtful
An analysis of Capitol Corp. shows the following data available as of December 31, 2021 from the company's unadjusted trial balance: Allowance for Doubtful Accounts Bad Debt Expense Credit Sales for 2021 Accounts Receivable Debit Credit 10,200 690,000 0 2,650,000 On December 31st, 2021, the company collected $6,200 of an account previously written off (the company has not made an entry yet for the collection of the $6,200.) The company also found out a customer's account in the amount of $2,500 is deemed uncollectible (they went bankrupt) and they have not made an entry for this transaction yet. Capitol Corp. estimates that 4% of their credit sales are uncollectible. What should be the ending balance in the Allowance for Doubtful Accounts as of December 31, 2021? a) $106,000 b) $119,900 c) $116,200 d) The correct ending Allowance for Doubtful Accounts balance is not listed. Question 19 (1 point) TempleSmith Inc. had a debit balance of $729,000 in it's Accounts Receivable and a credit balance of $12,500 in it's Allowance for Doubtful Accounts prior to any year-end adjustments. The company does not automatically write-off older accounts. They analyze their aging of Accounts Receivable to determine the amount of outstanding receivables that they estimate to be collectible at the end of the year as shown below. Days Account Outstanding Amount Probability of Collection Less than 31 days 347,000 98% Between 31 days and 60 days 179,200 88% Between 61 days and 90 days 90,400 72% Between 91 days and 120 days 80,500 60% Over 120 days 31,900 42% Total Accounts Receivable 729,000 What should be the ending balance in the Allowance for Doubtful Accounts at year-end? a) $624,542 b) $91,958 c) $104,458 d) $12,500
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started