Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who

You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries.In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories.The analysis indicates that an appropriate estimated balance for the allowance for uncollected accounts is $180,000.The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance.

After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category.This will change the required allowance for uncollected accounts from $180,000 to $135,000. Tactfully, you ask the controller for an explanation for the change and he tells you "We need the extra income, the bottom line is too low."

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

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

10th edition

1260481956, 1260310175, 978-1260481952

More Books

Students also viewed these Accounting questions