Question
Simpson Enterprises reported the following unadjusted balances at December 31, 2019: Accounts Receivable $860,500 dr. Allowance for Sales Discounts $ 3,300 cr. Allowance for Doubtful
Simpson Enterprises reported the following unadjusted balances at December 31, 2019: Accounts Receivable $860,500 dr.
Allowance for Sales Discounts $ 3,300 cr.
Allowance for Doubtful Accounts $ 68,500 cr.
At year end, it was determined that $75,600 of accounts receivable were uncollectable. Of the remaining receivables, it was determined that 65% were current (that is less than 30 days old), 25% were between 30 and 90 days old, and 10% were over 90 days old. Simpson estimates that 4% of current A/R will be uncollectible, 12% of 30-90 days A/R will be uncollectible, and 60% of over 90 days A/R will be uncollectible. Upon further analysis of the current receivables, it was determined that the allowance for sales discounts should be $2,760 in order to accommodate the accounts expected to be paid in the 2/10 discount period.
Required (round your calculations to the nearest dollar and show your work):
a. Calculate the NET Accounts Receivable balance to be reported on the statement of financial position for 2019.
b. Determine the Bad Debt Expense to be reported on the statement of comprehensive income for 2019.
(This is the entire question; No additional data i.e. graph, table, etc... Question from Textbook)
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