Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Options for drop downs: If you could please include any calculations that would be greatly appreciated. Thank you! Estimating and Recording Bad Debt Estimates and

image text in transcribedimage text in transcribedimage text in transcribed

Options for drop downs:

image text in transcribed

If you could please include any calculations that would be greatly appreciated. Thank you!

Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable Sun Systems Inc. had the following information: 1. Sales revenue for 2020, $180,000, of which one-sixth was on account. 2. Allowance for doubtful accounts, balance December 31, 2019, $900 credit. 3. On December 30, 2020, the company determines that a specific customer's account is uncollectible and writes off the account of $1,050. 4. Accounts receivable, balance December 31, 2020 (after write-offs during the year), $17,000. 5. Aging schedule at December 31, 2020, showing the following breakdown of total accounts receivable. Status Not past due Past due 1-60 days Past due over 60 days Amount $10,000 $4,000 3,000 Required a. Prepare the December 30, 2020 entry to write off the uncollectible accounts. b. Prepare the 2020 adjusting entry to record bad debt expense for each of the following separate assumptions concerning expected bad debt loss rates. Note: Treat each of the following scenarios separately, they are independent of one another. i. Bad debt expense is based on credit sales, 1.5%. (Hint: See p. 8-19: Alternative to Estimating Net Realizable Value) ii. The Allowance for Doubtful accounts is based on total receivables at year-end, 2.5%. iii. The Allowance for Doubtful accounts is based on aging schedule: not past due, 0.5%; past due 1-60 days, 1%; and past due over 60 days, 8%. a. Date Account Name Dr. Cr. Dec. 30, 2020 b. Note: Treat each scenario separately, they are independent of one another. i. Account Name Dr. Cr. Date Dec. 31, 2020 ii. Account Name Dr. Cr. Date Dec. 31, 2020 Cash Accounts Receivable Allowance for Doubtful Accounts Interest Receivable Inventory Inventory-Estimated Returns Refund Liability Sales Revenue Sales Returns Sales Discount Sales Discount Forfeited Cost of Goods Sold Bad Debt Expense N/A

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

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

Financial Accounting

Authors: Tony Davies, Ian Crawford

1st Edition

0273723073, 9780273723073

More Books

Students also viewed these Accounting questions

Question

What is the education level of your target public?

Answered: 1 week ago

Question

What advertising media and promotional tactics will you use?

Answered: 1 week ago