The internal control system provides reasonable assurance that the company's objectives are being met in all of the following areas EXCEPT which one?

a.reliability of financial reporting

b.compliance with applicable laws and regulations

c.effectiveness and efficiency of the company's operations

d.consolidation of departments within the accounting function

Problem 5-87A (Algorithmic) etermining Bad Debt Expense Using the Aging Method At the beginning of the year, Amherst Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Amherst had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Accounts Receivable Age Proportion Expected to Default Amount Current $15,000 0.01 1-15 days past due 5,300 0.02 16-45 days past due 3,100 0.08 46-90 days past due 3,600 0.15 Over 90 days past due 2,400 0.30 $ 29,400 Required: 1. Determine the desired postadjustment balance in allowance for doubtful accounts. $ 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. $ 3. Compute bad debt expense. $ 4. Prepare the adjusting entry to record bad debt expense. Record adjusting entry for bad debt expense estimate Previous Next