I need answers for these accounting problems as soon as possible please and thank you
Solon Co. had the following balances at January 1: I Accounts Receivable $50000 Positive asset (debit) o Allowance for Uncollectible Accounts $7500 Negative asset (credit) Note that at this point, each account has a normal balance. (Assets are normal debit balances, Accounts Receivable is an asset. The allowance for uncollectible accounts is a contra-asset so it has a normal credit balance.) The following transactions occurred during January: '1. Solon sold $480000 of merchandise on credit (on account). 2. Solon collected $412000 from customers on account. 3. Solon wrote-off $6000 at uncollectible accounts. Record the transactions in T-accounts or the accounting equation. The solutions here will use the equation approach and also show you the solution in t-accounts. Don't forget the beginning balances. Then answer the following questions: 1. What is the balance in Accounts Receivable after these transactions? Put a number (no negative signs) in the rst box and the word debit or credit in the second box. (It is a debit if it is a positive asset, a credit if it is a negative asset.) 2. What is the balance in the Allowance for Uncollectible Accounts after these transactions? Put a number (no negative signs) in the rst box and the word debit or credit in the second box. (It is a debit if it is a positive asset, a credit if it is a negative asset.) Arbour Inc. had the following balances on its balance sheet at the beginning of year 4. The balances in the two accounts are "normal" (so Accounts receivable is a positive asset and the allowance is a negative asset). Note that net realizable value is NOT an account balance. It is Accounts receivable net of the allowance balance. Accounts Receivable....................... Allowance for uncollectible accounts Net realizable value......................... During the year, Arbour recorded the following: Sales on account of ....... . $820000 Collections on account of.. . $754400 Write-offs of delinquent accounts... $13500 At the end of Year4, Arbour Company recorded an adjusting entry that recognized $16400 of bad debt expense. Enter all normal balances as positive numbers (just a number, no + sign.) 1. What would be the balance in Accounts Receivable after all of the entries above? 2. What would be the balance in the Allowance {or Uncollectible Accounts after all of the entries above? Hint: To solve, put the beginning balances in the equation. Record each piece of additional information in a balanced transaction, then compute the ending balances for these two account. Planeto uses the aging method (percentage of accounts receivable) for recording the adjustment for bad debt expense. At December 31 (THE END OF THE YEAR), Planeto Inc. has Accounts receivable of $425000. $350000 of Accounts Receivable are current; $75000 of Accounts Receivable are over 120 days old. Planeto has found that historically 1% of current accounts and 5% of accounts over 120 days old are uncollectible. Planeto has a $620 credit balance in the Allowance for Unoolleotible Accounts before the 12/31 adjusting entry. 1) What will be the balance in the allowance account on the balance sheet? (It is a credit balance, which is a normal balance, so enter as a positive number here even though it is a negative asset in the accounting equation.) 2) How much bad debt expense will Planeto, Inc. recognize for the year ended 12I31? 3) What is the net realizable value of Planeto's accounts receivable on the balance sheet? Hint: Always do these out in the equation or in t-accounts. With the % of Accounts Receivable method, this is the setup: Assets Liab. Equity Amounts Allowance for Doubtful RE Receivable Amounts Beg.Ba|. 425000 - 620 Adjustment % of AR method gives you this number. The adjusted balance must be a negative asset. End. Bal. Stavros Company uses the aging method (percentage of accounts receivable) for recording the adjustment for bad debt expense. At December 31, Stavros Company has $320000 of Accounts Receivable that are current and $25000 of Accounts Receivable that are over 120 days old. Stavros Company has found that historically 2% of current accounts and 8% of accounts over 120 days old are uncollectible. Stavros Company has a $840 debit balance in the Allowance for Uncollectible Accounts before the 12/31 adjusting entry. 'l)What will be the balance in the allowance account on the balance sheet?(lt is a credit balance. which is a normal balance, so enter as a positive number here even though it is a negative asset in the accounting equation.) 2) How much bad debt expense will Stavros Company recognize for the year ended 12/31? 3) What is the net realizable value of the accounts receivable on the balance sheet? Hint: Always do these out in the equation or in t-accounts. With the % of Accounts Receivable method, this is the setup: Assets Liab. Equity Accounts Allowance for RE Receivable Doubtful Accounts Beg,Ba|. 345000 + 840 Adjustment % of AR method gives End Ba| you this number. It must - I be a negative asset after adjustment. Campbell uses the percentage of net credit sales method for recording the adjustment for bad debt expense. For our purposes, net credit sales will just equal sales on credit. (Generally, a company subtracts discounts and returns on credit sales to get net credit sales. For us, those will be assumed to be zero. 80- % of credit sales method is the same as the % of net credit sales method.) At December 31 of the current year, Campbell has $320000 of Accounts Receivable. During the current year, Campbell sold $910000 of goods on credit. Campbell has found that historically 0.5% of its net credit sales are uncollectible. Campbell has a $860 credit balance (negative asset) in the Allowance for Uncollectible Accounts before the 12/31 adjusting entry. Note-- in this problem you are given UNADJUSTED balances in accounts receivable and the allowance at the balance sheet date. Those balances would already include the transactions recorded throughout the year (sales, collections, write-offs). So in this setup, you do not record anything except the adjusting entry. In other setups, you may be given the beginning balances and then you would record all of the transactions AND an adjusting entry. 1) How much bad debt expense will Campbell recognize for the year? 2) What will be the balance in the allowance account on the balance sheet?(lt is a credit balance, which is a normal balance, so enter as a positive number here even though it is a negative asset in the accounting equation.) 3) What is the net realizable value of Campbell's accounts receivable on the balance sheet? Hint: As always, record a balanced transaction before answering the questions. The % of net credit sales method computes the amount that will show up on the income statement as bad debt expense. Assets Liab. Equity Amounts Allowance for RE Receivable Doubtful Amounts gmdlusmd 320000 -860 al. the % of net credit sales method Adjustment computes this number (bad debt expense) Adjusted Bal. Fritters Inc. uses the percentage of net credit sales method for recording the adjustment for bad debt expense. At December 31 of the current year, Fritters Inc. has $320000 of Accounts Receivable. During the current year, Fritters Inc. sold $920000 of goods on credit. Fritters Inc. has found that historically 0.7% of its net credit sales are uncollectible. Fritters Inc. has a $1100 debit balance in the Allowance for Uncollectible Accounts before the 12131 adjusting entry. This is an abnormal positive asset balance. Note-- in this problem you are given unadjusted balances in accounts receivable and the allowance at the balance sheet date (END ofthe year). Those balances would already include the transactions recorded throughout the year (sales, collections, write-offs). So in this setup, you do not record anything except the adjusting entry. In other setups, you may be given the beginning balances and then you would record all of the transactions AND an adjusting entry. 1) How much bad debt expense will Fritters Inc. recognize for the year? 2) What will be the balance in the allowance account on the balance sheet? (It is a credit balance, which is a normal balance, so enter as a positive number here even though it is a negative asset in the accounting equation.) 3) What is the net realizable value of accounts receivable on the balance sheet? Hint: As always, record a balanced transaction before answering the questions. The % of net credit sales method computes the amount that will show up on the income statement as bad debt expense. l Assets Liab. Equity Accounts Allowance for RE Receivable Doubtful Accounts \"nad'med 320000 +11 00 balance the /o of net credit sales method Adjustment computes this number (bad debt expense) Adjusted balance Heath Company had the following balances on its balance sheet at the end of year 3: Accounts Receivable ........................... 487000 Allowance for uncollectible accounts ...... 24350 Net realizable value ........................... 462650 Heath Company had the following balances on its balance sheet at the end of year 4: Accounts Receivable ............................ 768100 Allowance for uncollectible accounts ....... 29450 Net realizable value ........................... 738650 During year 4, Heath had sales (all on credit) of $4600000. They record bad debt expense based on 2% of credit sales. No recoveries of prior year write-offs were received in year 4. 1. What was bad debt expense in year 4? 2. How much cash did Heath collect on account in year 4? 3. What amount of accounts were written off as uncollectible in year 4? To solve 2 and 3, put what you know into the accounting equation, and then back into the missing amounts. [Setup Cash, Accounts receivable and the Allowance under Assets, You will not use the Liabilities column, Setup Retained earnings under Equity.] You know beginning and ending balances in AIR and the allowance. Note that the allowance account is a negative asset when it is a normal balance. You know sales on account- record that as a transaction. You know what the adjusting entry was record that as a transaction. Now you should be able to gure out the full write-off transaction- record that. Finally you can compute collections on account. This problem is a great overview. It shows that you understand the effect of all of these transactions on the nancial statements
