Bad Credit

Homework 7 Bad Debt Accounts Receivable Aging for Lowry Inc. March 31, 2020 Current Jan-90 91-180 181-360 360+ Total 100.000 80,000 60,000 40,000 20,000 300,000 Lowry Inc had sales of $150,000 for the month of March As of February 29, 2020, Lowry's Allowance for Doubtful Accounts has a credit balance of $11,500 Historically, Lowry has been unable to collect 4% of their outstanding Acccounts Receivable balances Using the Percentage of Receivables Method and a 4% reserve rate, what is Lowry's required reserve as of the end of March? ANSWER: By how much should Lowry increase or decrease Allowance for Doublul Accounts ? ANSWER: What is the journal entry that Lowry should record on March 31, 2020 to estimate bad debt? Homework 7 Bad Debt Accounts Receivable Aging for Lowry Inc. March 31, 2020 Current Jan-90 91-180 181-360 360+ 100,000 60,000 40,000 20,000 Lowry Inc had sales of $150,000 for the month of March As of February 29, 2020, Lowry's Allowance for Doubtful Accounts has a credit balance of $11,500 Historically, Lowry has been unable to collect 2% of their total sales Using the Percentage of Sales Method and a 2% reserve rate, what is Lowry's bad debt expense for March? 80,000 Total 300,000 ANSWER: What is the journal entry that Lowry should record on March 31, 2020 to estimate bad debt? 360 20,000 B0% Total 300,000 Homework 7 Bad Debt Accounts Receivable Aging for Lowry Inc. March 31, 2020 Aging Buckets Current 1-90 91.180 181-360 Amount 100,000 80,000 60,000 40,000 Reserve Rate 3% 10% 20% Lowry Inc had sales of $150,000 for the month of March As of February 20, 2020, Lowry's Allowance for Doubtful Accounts has a credit balance of $30,000 Using the Aging of Receivables Method, what is Lowry's required reserve as of the end of March? 1% ANSWER By how much should Lowry increase or decrease Allowance for Doubful Accounts ? ANSWER What is the journal entry that Lowry should record on March 31, 2020 to estimate bad debt? 360+ Total 300,000 20,000 Homework 7 Bad Debt Accounts Receivable Aging for Lowry Inc. March 31, 2020 Current 1-90 91-180 181-360 100,000 80,000 60,000 40,000 Lowry Inc had sales of $150,000 for the month of March As of February 29, 2020, Lowry's Allowance for Doubtful Accounts has a credit balance of $11,500 Historically, Lowry has been unable to collect 2% of their total sales On March 31, one of Lowry's customers, who owe Lowry $3,500, files for bankrupcy Using the Direct Write Off Method, what if Lowry's bad debt expense for March? ANSWER: What is the journal entry that Lowry should record on March 31, 2020 to record bad debt? Homework 7 Bad Debt Accounts Receivable Aging for Salty Inc. April 30, 2020 Current 1-90 91-180 181-360 360+ 25,000 20,000 18,000 10,000 Salty Inc had sales of $70,000 for the month of April As of March 31, 2020, Sally's Allowance for Doubtful Accounts has a credit balance of $3,000 Historically, Lowry has been unable to collect 2% of their total sales Using the Percentage of Sales Method and a 1.5% reserve rate, what is Salty's bad debt expense for April? Total 76,000 3,000 ANSWER: What is the journal entry that Salty should record on April 30, 2020 to estimate bad debt? Homework 7 Bad Debt Accounts Receivable Aging for Salty Inc. April 30, 2020 Aging Buckets Current 1-90 91-180 Amount 25,000 20,000 18,000 Reserve Rate 1% 5% 15% Salty Inc had sales of $70,000 for the month of April As of March 31, 2020, Sally's Alowance for Doubtful Accounts has a credit balance of $12,000 Using the Aging of Recolvables Method, what is Sally's required reserves of the end of April? 181-360 10,000 50% 360+ 3,000 100% Total 76,000 ANSWER: By how much should Salty Increase or decrease Allowance for Doublul Accounts? ANSWER: What is the Journal entry that Salty should record on April 30, 2020 to estimate bad debt? Homework 7 Bad Debt Accounts Receivable Aging for Salty Inc. April 30, 2020 Current 1-90 91-180 181-360 Total 25,000 20,000 18,000 10,000 3,000 78,000 Salty Inc had sales of $70,000 for the month of March As of March 31, 2020, Salty's Allowance for Doubtful Accounts has a credit balance of $3,000 Using the Percentage of Recelvables Method and a 3% reserve rate, what is Salty's required reserve as of the end of April? 360+ ANSWER By how much should Salty increase or decrease Allowance for Doublul Accounts ? ANSWER: What is the journal entry that Salty should record on April 30, 2020 to estimate bad debt? Total 555,000 Homework 7 Bad Debt Accounts Receivable Aging for Colombo Inc. April 30, 2020 Aging Buckets Current 1-90 91-180 181-360 360+ Outstaning Balance 300,000 140,000 88,000 25,000 2,000 Reserve Rate 2% 5% 10% 60% 100% Colombo Inc had sales of $70,000 for the month of April. When Colombo uses the Percentage of Sales Method, they reserve at a rate of 1% When Colombo uses the Percentage of Receivables Method, they reserve at 6% When Colombo uses the Aging of Receivables Method, the use the rates listed immediately below the outstanding AR balances by bucket As of March 31, 2020, Colombo's Allowance for Doubtful Accounts has a credit balance of $35,000 Using the Percentage of Sales Method, what is Colombo's bad debt expense for April? ANSWER: What is the journal entry that Colombo should record on April 30, 2020 to estimate bad debt? Using the Percentage of Receivables Method, what is Colombo's required reserve as of the end of April? ANSWER: By how much should Colombo increase or decrease Allowance for Doublul Accounts ? ANSWER: What is the journal entry that Colombo should record on April 30, 2020 to estimate bad debt? Using the Aging of Receivables Method, what is Colombo's required reserve as of the end of April? ANSWER By how much should Colombo increase or decreare Allowance for Doublul Accounts ? ANSWER What is the journal entry that Colombo should record on April 30, 2020 to estimate bad debt? Homework 8 Bad Debt Debit Allowance for Doubtful Accounts Credit Accounts Receivable Bad Debt Expense Cash