Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P7-3 (Bad-Debt of bad debts. Before Reporting-Aging) Manilow Corporation operates in an industry that has a high rate any year-end adjustments, the balance in Manilow's
P7-3 (Bad-Debt of bad debts. Before Reporting-Aging) Manilow Corporation operates in an industry that has a high rate any year-end adjustments, the balance in Manilow's Accounts Receivable and the Allowance for Doubtful Accounts had a credit balance of $40,000. The year end rap onesd in the blance sheet for the Allowance for Doubtfal Accounts will be based on the aging ance schedule shown below. Days Account Outstanding Amoun Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days20.000 Over 75 days $300,000 100,000 80,000 40,000 Collection .98 .90 85 .80 .55 15,000 instructions (a) What is the appropriate balance for the Allowance for Doubtful Accounts at year-end? b) Show how accounts receivable would be presented on the balance sheet. ic) What is the dollar effect of the year-end bad debt adjustment on the before-tax income? (CMA adapted Bad-Debt Reporting) From inception of operations to December 31, 2010, Fortner Corporation monthly at 2% ot credit sales bad debts written off were charged to the allowance account monned P74 provided for uncollectible accounts receivable under the allowance method: provisions were bad debts previously written off were credited to the allowance account, and no year-end adjustments allowance account were made. Fortner's usual credit terms are net 30 days The balance in the Alk wance for Doubtful Accounts was $130,000 at January 1. 2010 During 200 sals k dald S,00,00 interim provisions for doubtful accounts were made at 2 %of credit sin $90,000 of bad debts $15,0 Further installed computer were written off, and recoveries of accounts previously written off system in November 2010, and an aging of acounts nceivable was
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started