Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

S & R Company uses the aging of accounts receivable approach to estimate bad debt expense. On December 31, 2020, an analysis of accounts receivable

S & R Company uses the aging of accounts receivable approach to estimate bad debt expense. On December 31, 2020, an analysis of accounts receivable revealed the following:

Required:

(a) Calculate the amount of allowance for doubtful accounts that should be reported on the balance sheet at December 31, 2020. (3 marks)

(b) Calculate the amount of bad debts expense that should be reported on the 2020 income statement, assuming that the balance of Allowance for Doubtful Accounts on January 1 was $44,000 (credit balance) and accounts receivable written off during the year totaled$49,200.(2 marks)

(c) Present the appropriate general journal entry to record bad debts expense on December 31, 2020. (2 marks)

(d) Show how accounts receivable will appear on the balance sheet at December 31,2020.(3 marks)

Schedule of Accounts Receivable by Age

Dec. 31, 2020Age of AccountsExpected %Allowance for

AccountsReceivableUncollectibledoubtful accounts

Receivable

140,000Not yetdue0.75%

60,0001-30 days pastdue4%

19,00031-60 days pastdue10%

5,00061-90 days pastdue60%

7,000Over 90 days pastdue90%

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

Forensic Accounting And Fraud Examination

Authors: Paul Barnes

1st Edition

1118454138, 978-1118454152

More Books

Students also viewed these Accounting questions

Question

Purpose: What do we seek to achieve with our behaviour?

Answered: 1 week ago

Question

An action plan is prepared.

Answered: 1 week ago