My questions are E6-2A and E6-8A
E6-1A. Credit Losses Based on Percentage of Credit Sales Lewis Company uses the allowance method for recording its expected credit losses. It estimates credit losses at 1 percent of credit sales, which were $900,000 during the year. On December 31, the Accounts Receivable balance was $150.000, Determine the amount and the financial statement effect of the adjustment to record the credit LO2 VIBC and the Allowance for Doubtful Accounts had a balance of $10,200 before adjustment. a. losses for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. E6-2A. Credit Losses Based on Accounts Receivable Aging Hunter, Inc., analyzed its accounts receiv. able balances at December 31, and arrived at the aged balances listed below, along with the per- centage that is estimated to be uncollectible: ,2 BC Probability of Noncollection Balance Age Group 0-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due Over 180 days past due $ 90,000 20,000 11,000 6,000 4,000 $131,000 1 2 5 10 25 a. The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $520 on December 31, before any adjustments. Determine the amount of the adjustment for estimated credit losses on December 31. b. Determine the financial statement effect of a write off of the Rose Company's account on April 10 of the following year in the amount of $425. Allowance Method On March 10, Gardner, Inc., declared a $900 account receivable from the 16.3A Its recent annual report: ais- L05 ( ce 11 a. b. c. Net sales. Year 1 Year 2 Beginning accounts receivable (net) $67,096 $81,662 Ending accounts receivable (net). 3,896 3,696 3,696 3,598 Calculate the accounts receivable turnover ratio for both years. Calculate the average collection period for both years. Is the company's accounts receivable management improving or deteriorating? E6-8A. Credit Losses Based on Percentage of Credit Sales Los Altos, Inc. uses the allowance method of handling its credit losses. It estimates credit losses at one percent of credit sales, which were $1,800,000 during the year. On December 31, the Accounts Receivable balance was $300,000, and the Allowance for Doubtful Accounts had a credit balance of $20,400 before adjustment. Determine the amount and financial statement effect of the adjustment to record the credit losses for the year. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet. LO2 MBC a. E6-9A. Credit Losses Based on Accounts Receivable Aging Miller, Inc., analyzed its accounts receiv- LO1, 2 able balances at December 31 and arrived at the aged balances listed below, along with the percent- age that is estimated to be uncollectible: ( Probability of Noncollection Balance Age Group 0-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due Over 180 days past due. $180,000 40,000 22,000 12,000 8,000 $262,000 1 2 5 10 25 od The credit balance of the Allowance
