Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Entry for Uncollectible Accounts Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company'saccounts receivableon December 31, 20Y3, and a historical

Entry for Uncollectible Accounts

Easy Rider International is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, 20Y3, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows:

Age Interval                         Balance                   Percent Uncollectible
Not past due                        $1,850,000                           1%
1–30 days past due                750,000                            2 
31–60 days past due              100,000                            6 
61–90 days past due                60,000                            14 
91–180 days past due              45,000                            60 
Over 180 days past due            25,000                            90    

                                                $2,830,000     

Assume that the allowance for doubtful accounts for Easy Rider International had a negative balance of $(13,300) as of December 31, 20Y3.

Illustrate the effects of the adjustment for uncollectible accounts as of December 31, 20Y3, on the accounts and financial statements.

If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

Balance Sheet:
Statement of cash flows          Assets   = Liabilites + stockholders equity       

                                                 Allowance for doubtful accounts + no effect = No effect + Retained earnings

Dec. 31         ______________________________________          0 = 0 +__________________________________
Statemet of cash flows                                                                                    Bad Debt Expense ___________
No Effect                     0

Step by Step Solution

3.42 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

To illustrate the effects of the adjustment for uncollectible accounts as of December 31 20Y3 on the accounts and financial statements we need to calculate the necessary adjustments based on the aging ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Carl S. Warren

8th edition

1305961889, 978-1337517386, 1337517380, 978-1305961883

More Books

Students also viewed these Accounting questions