Question
During 2010, a company provides services of $400,000 on account. Of this amount, $50,000 remains uncollected at the end of the year. An aging schedule
- During 2010, a company provides services of $400,000 on account. Of this amount, $50,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2010, is provided below. Before bad debt expense is recorded, the allowance for doubtful accounts had a $300 credit balance.
Age Group | Amount Receivable | Estimated % Uncollectible |
Not yet due | 30,000 | 2% |
0-30 days past due | 10,000 | 5% |
31-60 days past due | 7,000 | 10% |
More than 60 days past due | 3,000 | 20% |
Total | 50,000 |
|
- Calculate the desired ending balance for the allowance for uncollectible accounts.
- Record the December 31, 2010 journal entry to record the periods estimate of uncollectible accounts.
- On April 3, 2011, a customers account balance of $400 is written off as uncollectible. Record the write-off in a journal entry.
- On July 17, 2011, the customer whose account was written off in part 3 unexpectedly pays
$100 of the amount but does not expect to pay any additional amount. Record the cash collection.
- During July and August, a firm sells goods to three customers. The transactions are listed below.
August 1 Sold goods for $1,500 to Customer 1 and billed that amount subject to terms 2/10, n/30. |
August 1 Sold goods to Customer 2 for $850 and billed that amount subject to terms 2/10, n/30. |
August 4 Collected cash due from Customer 1 |
September 2 Collected cash due from Customer 2 |
September 28 Sold goods for $500 to Customer 3, who paid with a credit card (4% fee). |
Compute 1) Gross sales and 2) net sales for the two months ending on the last day of September.
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