Question 1

Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Halen Companys unadjusted trial balance at December 31, 2014, included the following accounts.

		Debit		Credit
Allowance for doubtful accounts		$6,110
Net sales				$1,294,000

Halen Company estimates its bad debt expense to be 1.9% of net sales. Determine its bad debt expense for 2014.

2. An analysis and aging of Stuart Corp. accounts receivable at December 31, 2014, disclosed the following.

Amounts estimated to be uncollectible		$ 180,500
Accounts receivable		1,792,200
Allowance for doubtful accounts (per books)		128,300

What is the net realizable value of Stuarts receivables at December 31, 2014?

3. Shore Co. provides for doubtful accounts based on 3% of credit sales. The following data are available for 2014.

Credit sales during 2014		$2,446,300
Allowance for doubtful accounts 1/1/14		17,800
Collection of accounts written off in prior years (customer credit was reestablished)		8,800
Customer accounts written off as uncollectible during 2014		38,600

What is the balance in Allowance for Doubtful Accounts at December 31, 2014?

4. At the end of its first year of operations, December 31, 2014, Darden Inc. reported the following information.

Accounts receivable, net of allowance for doubtful accounts		$944,600
Customer accounts written off as uncollectible during 2014		28,900
Bad debt expense for 2014		87,500

What should be the balance in accounts receivable at December 31, 2014, before subtracting the allowance for doubtful accounts?

5. The following accounts were taken from Bullock Inc.s trial balance at December 31, 2014.

		Debit		Credit
Net credit sales				$750,200
Allowance for doubtful accounts		$12,800
Accounts receivable		341,500

If doubtful accounts are 2% of accounts receivable, determine the bad debt expense to be reported for 2014.