XYZ Company supplies industrial cooking equipment to restaurant chains in the Philippines. They have established the following schedule for their accounts receivable collection: 35% payable within 1 week of invoice date, 35% payable within one month of invoice date, and 30% payable within 2 months of date of invoice.

The following table summarizes the credit sales of the company for December 2018 to Feb 2019:

Company

Amount

Invoice Date

A

2,100,000

December 5, 2018

B

1,880,000

December 27, 2018

C

1,700,000

January 15, 2019

D

3,850,000

February 23, 2019

The table below details the amount of payments received by The Big Spoonful as of February 28, 2019. Assume that all receivables not received are considered bad debts:

Company

Amount Received as of February 28, 2019

A

1,950,000

B

1,755,000

C

1,100,000

D

1,250,000

Prepare the collection schedules for these accounts receivable from December 2018 to April 2019. (4 pts)

Company

Dec

Jan

Feb

Mar

Apr

A

B

C

D

Question

Answer

Pts

How much is the total payments that should have been received by February 28, 2019?

Given the amount paid as of February 28, 2019, how much bad debt should be recognized as of that date?

Using the allowance for bad debt method, what should be the adjusting entry for the bad debt?

Suppose that 25% of the bad debt is deemed uncollectible, what should be the adjusting entry using the direct write off-method?

Suppose that 75% of the amount previously written-off was paid, what should be the corresponding adjusting entry?