Question
Problem 7-2 Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1.Pronghorn Company's
Problem 7-2 Presented below are a series of unrelated situations.
Answer the questions relating to each of the five independent situations as requested.
1.Pronghorn Company's unadjusted trial balance at December 31, 2017, included the following accounts.
Debit | Credit |
Accounts receivable | $50,500 |
Allowance for doubtful accounts | $5,670 |
Net sales | $1,255,000 |
Pronghorn Company estimates its bad debt expense to be5% of gross accounts receivable. Determine its bad debt expense for 2017.
Bad debt expense for 2017 | $ |
2.An analysis and aging of Stellar Corp. accounts receivable at December 31, 2017, disclosed the following.
Amounts estimated to be uncollectible | $182,490 |
Accounts receivable | 1,776,700 |
Allowance for doubtful accounts (per books) | 127,430 |
What is the net realizable value of Stellar's receivables at December 31, 2017?
The net realizable value | $ |
3.Pearl Co. provides for doubtful accounts based on3% of gross accounts receivable, The following data are available for 2017.
Credit sales during 2017 | $3,298,300 |
Bad debt expense | 58,990 |
Allowance for doubtful accounts 1/1/17 | 16,550 |
Collection of accounts written off in prior years (customer credit was reestablished) | 7,280 |
Customer accounts written off as uncollectible during 2017 | 28,560 |
What is the balance in Allowance for Doubtful Accounts at December 31, 2017?
The balance in Allowance for Doubtful Accounts | $ |
4.At the end of its first year of operations, December 31, 2017, Martinez Inc. reported the following information.
Accounts receivable, net of allowance for doubtful accounts | $925,900 |
Customer accounts written off as uncollectible during 2017 | 23,030 |
Bad debt expense for 2017 | 86,750 |
What should be the balance in accounts receivable at December 31, 2017, before subtracting the allowance for doubtful accounts?
Accounts receivable, before deducting allowance for doubtful accounts | $ |
5.The following accounts were taken from Sandhill Inc.'s trial balance at December 31, 2017.
Debit | Credit |
Net credit sales | $823,700 |
Allowance for doubtful accounts | $12,620 |
Accounts receivable | 305,200 |
If doubtful accounts are3% of accounts receivable, determine the bad debt expense to be reported for 2017.
The bad debt expense, as adjusted | $ |
Record the two journal entries that should be recorded by Cheyenne Inc. for the sales transactions above that took place on July 1, 2017.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
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