Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On the year end of October 31, 2020, Hainbow Appliances had the following account balances before adjustments for bad debt was made Net Credit Sales

image text in transcribed

On the year end of October 31, 2020, Hainbow Appliances had the following account balances before adjustments for bad debt was made Net Credit Sales for the period $1,204,000 CR Accounts Receivable $782,000 DR AFDA $3,800 CR Do not enter dollar signs or commas in the input boxes a! Use the year-end balances reported on the balance sheet and the aging schedule shown below to calculate the allowance for doubtful accounts. Aging Category Bad Debt % Balance Estimated Bad Debt Less than 30 days 1% 8517,000 21-60 days 3.5% S138,000 61-90 days 14% $63,000 191-120 days 23% $40,000 Cver 120 days 48% $24,000 Total $782,000 Prepare the cumal entry to record bad debt expense for the year. Date Account Title and Explanation Debit Credit Oct 31 To record bad debt expense bi Assume instead that Rainbow Appliances used the income statement approach for estimating bad debt. If historical data indicates that approximately 2% of net credit sales are uncollectible, what amount is expected to be uncollectible? Uncoinctible amount: Using the information provided at the beginning of the question, what is the balance in the allowance for doubtful accounts after the adjustment using the income statement approach? Allowance for doulotful accounts

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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_2

Step: 3

blur-text-image_3

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

Accounting For Managers Interpreting Accounting Information For Decision Making

Authors: Paul M. Collier

2nd Edition

0470016094, 9780470016091

More Books

Students also viewed these Accounting questions