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eBook Show Me How Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method The following selected transactions were taken from the records

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eBook Show Me How Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Method The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: June 8. Wrote off account of Kathy Quantel, $3,350. Aug. 14. Received $2,380 as partial payment on the $6,000 account of Rosalie Oakes. Wrote off the remaining balance as uncollectible, Oct. 16. Received the $3,350 from Kathy Quantel, whose account had been written off on June 8. Reinstated the account and recorded the cash receipt. Dec. 31. Wrote off the following accounts as uncollectible (record as one journal entry): Wade Dolan $970 Greg Gagne 600 Amber Kisko Shannon Poole Dec. 31 2,310 1,340 Niki Spence 370 If necessary, record the year-end adjusting entry for uncollectible accounts. If no entry is required, select "No entry and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. a. Journalize the transactions under the direct write-off method Bad Debt Expense Accounts Receivable-Kathy Quantel June 8 88 Aug 14 Cash Bad Debt Expense Accounts Receivable-Rosalie Oakes Oct. 16 Accounts Receivable-Kathy Quantel eBook June Accounts Receivable-Kathy Quantel Cash Aug. 14 Bad Debt Expense Accounts Receivable-Rosalie Oakes Accounts Receivable-Kathy Quantel Oct. 16 Bad Debt Expense Oct. 16 Cash Accounts Receivable-Kathy Quantel II III II II 111111 11 II III II II 111111 II Bad Debt Expense Dec. 31 Accounts Receivable-Wade Dolan Accounts Receivable-Greg Gagne Accounts Receivable-Amber Kisko Accounts Receivable-Shannon Poole Accounts Receivable-Niki Spence Dec. 31 No entry No entry b. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of $10,050 at the beginning of the year and the company uses the analysis of recolvables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: Estimated Percent of Uncollectible Accounts 1 % Aging Class (Number of Days Past Due) 0-30 days 31-60 days 61-90 days 91-120 days More than 120 days Receivables Balance on December 31 $161,000 60,000 19,000 7,000 7 25 55 90 10,000 $257,000 Total receivables June 8 Allowance for Doubtful Accounts Accounts Receivable-Kathy Quantel v Aug. 14 Cash Allowance for Doubtful Accounts Accounts Receivable-Rosalie Oakes Oct. 16 Accounts Receivable-Kathy Quantel Allowance for Doubtful Accounts II II 10 Oct. 16 Cash Accounts Receivable-Kathy Quantel eBook Show Me How Oct. 16 Cash Accounts Receivable-Kathy Quantel 10 II II Dec. 31 Allowance for Doubtful Accounts Accounts Receivable-Wade Dolan Accounts Receivable-Greg Gagne v Accounts Receivable-Amber Kisko Accounts Receivable-Shannon Poole Accounts Receivable-Nikl Spence II III Dec. 31 Bad Debt Expense Allowance for Doubtful Accounts F MCHO My Work Remember that under the direct write-off method, Bad Debt Expense is not recorded until the customer's account is determined to be worthless Under the allowance method once a customer account is identified as uncollectible, it is written off against the allowance account c. How much higher (lower) would Rustic Tables' net income have been under the direct write-off method than under the allowance method? Higher by Entries for Notes Receivable Valley Designs issued a 90-day, 12% note for $78,000, dated April 17, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest a. Determine the due date of the note. July 16 b. Determine the maturity value of the note. ci. Journalize the entry to record the receipt of the note by Bork Furniture. If an amount box does not require an entry, leave it blank Notes Receivable Accounts Receivable-Valley Designs Feb c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank Cash Notes Receivable Interest Revenue Food

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