Question
Wasabi Corp.'s accounts receivable subsidiary ledger shows the following information: Customer Account balance Invoice Date Invoice Amount Ruel, Inc 35,180 12/6/12 14,000 11/29/12 21,180 Blanca,
Wasabi Corp.'s accounts receivable subsidiary ledger shows the following
information:
Customer
Account balance
Invoice Date
Invoice
Amount
Ruel, Inc
35,180
12/6/12
14,000
11/29/12
21,180
Blanca, Inc
20,920
9/27/12
12,000
8/20/12
8,920
Hannah, Inc
30,600
12/8/12
20,000
10/25/12
10,600
Renee, Inc
45,140
11/17/12
23,140
10/9/12
22,000
Henry, Inc
31,600
12/12/12
19,200
12/2/12
12,400
Edmund, Inc.
17,400
9/12/12
17,400
The estimated bad debt rates are based on Wasabi Corp's receivable collection
experience.
Age of Accounts
Rate
0-30 days
1%
31-60 days
1.5%
61-90 days
3%
91-120 days
10%
Over 120 days
50%
The allowance for bad debts account had a debit balance of P5,500 on
December 31, 2012, before adjustment.
The allowance for bad debts to be reported on the statement of financial
position at December 31, 2012, is
142.
The following transactions affecting the accounts receivable of Aaron
Company took place during the year ended December 31, 2014:
Sales (cash and credit)
5,900,000
Cash received from credit customers, all of whom took advantage
of the discount feature of the company's credit terms 4/10,n/30
3,024,000
Cash received from cash customers
2,100,000
Accounts receivable written off as worthless
50,000
Credit memorandum issued to credit customers for sales returns
and allowances
250,000
Cash refunds given to cash customers for sales returns and
allowances
20,000
Recoveries on accounts receivable written off as uncollectible in
prior periods (not included in cash amount stated above)
80,000
The following balances were taken from the January 1, 2014 statement of
financial position:
Accounts receivable
950,000
Allowance for bad debts
90,000
The entity provides for its net uncollectible account losses by crediting
allowance for bad debts for 2% of net credit sales for the fiscal period.
What is the balance of allowance for bad debts after adjustment on December
31, 2014?
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