Problem 7-02

The following are a series of unrelated situations.

Answer the questions relating to each of the five independent situations as requested.

1.Kingbird Company's unadjusted trial balance at December 31, 2020, included the following accounts.

Debit

Credit

Accounts receivable

$52,100Allowance for doubtful accounts6,350Net sales$1,223,900

Kingbird Company estimates its bad debt expense to be5% of gross accounts receivable. Determine its bad debt expense for 2020.

Bad debt expense for 2020$

2.An analysis and aging of Oriole Corp. accounts receivable at December 31, 2020, disclosed the following.

Amounts estimated to be uncollectible$181,850Accounts receivable1,759,600Allowance for doubtful accounts (per books)127,290

What is the net amount expected to be collected of Oriole's receivables at December 31, 2020?

Net realizable value$

3.Waterway Co. provides for doubtful accounts based on3% of gross accounts receivable, The following data are available for 2020.

Credit sales during 2020$1,731,800Bad debt expense

57,960Allowance for doubtful accounts 1/1/2016,450Collection of accounts written off in prior years (customer credit was reestablished)7,750Customer accounts written off as uncollectible during 202032,200

What is the balance in Allowance for Doubtful Accounts at December 31, 2020?

Allowance for doubtful accounts 12/31/20$

4.At the end of its first year of operations, December 31, 2020, Wildhorse Inc. reported the following information.

Accounts receivable, net of allowance for doubtful accounts$860,700Customer accounts written off as uncollectible during 202024,180Bad debt expense for 202076,910

What should be the balance in accounts receivable at December 31, 2020, before subtracting the allowance for doubtful accounts?

Accounts receivable, before deducting allowance for doubtful accounts$

5.The following accounts were taken from Sheffield Inc.'s trial balance at December 31, 2020.

Debit

Credit

Net credit sales$743,400Allowance for doubtful accounts$12,750Accounts receivable311,300

If doubtful accounts are3% of accounts receivable, determine the bad debt expense to be reported for 2020.

Bad debt expense, as adjusted