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Exam 15: Accounts Receivable and Uncollectible Accounts

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Question 51

Multiple Choice

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On December 31, 2019, prior to adjustments, the Allowance for Doubtful Accounts has a debit balance of $750. An aging of the accounts receivable produces an estimate of $6,500 of probable losses from uncollectible accounts. -The adjusting entry needed to record the estimated losses from uncollectible accounts includes a:

A) a credit to Allowance for Doubtful Accounts for $7,250
B) a debit to Uncollectible Accounts Expense for $5,750
C) a debit to Uncollectible Accounts Expense for $6,500
D) a credit to Allowance for Doubtful Accounts for $6,500

E) B) and C)
F) A) and B)

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Question 52

Multiple Choice

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The existing balance in Allowance for Doubtful Accounts at the end of the year is not considered when the estimate of uncollectible accounts is based on

A) a percent of total accounts receivable outstanding.
B) a percent of net income.
C) an aging of accounts receivable.
D) a percent of net credit sales.

E) A) and B)
F) None of the above

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Question 53

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At the end of the current year, the trial balance of Kerry Hardware included the accounts and balances shown below. Credit sales were $7,560,000. Returns and allowances on these sales were $62,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.4 percent of net credit sales. Accounts Receivable $ 590,000 Dr. Allowance for Doubtful Accounts 3,700 Cr. 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the amount of the adjusting entry for the estimated loss from uncollectible accounts?

Raymond Repair Services Company uses the direct charge-off method to record uncollectible accounts. On January 15, 2019, the company learned that Caroline Smith, a customer who owed $560, had moved and left no forwarding address. Raymond concluded that no part of the debt was collectible. Prepare the general journal entry to write off the account.

At the end of the current year, the trial balance of Carlton's Auto Sales included the accounts and balances shown below. Credit sales were $9,200,000. Returns and allowances on these sales were $55,000. Assume that the firm bases its estimate of the loss from uncollectible accounts on 0.3 percent of net credit sales. Accounts Receivable $ 1,300,000 Dr. Allowance for Doubtful Accounts 9,000 Cr. Sales 14,000,000 Cr. Sales Returns and Allowances 110,000 Dr. 1. What is the estimated loss from uncollectible accounts for the current year? 2. What is the balance in the Allowance for Doubtful Accounts after adjustment?

The Salinas Company uses the direct charge-off method to record uncollectible accounts. The following transactions occurred during 2019. Record the transactions on page 6 of a general journal, assuming the company also uses a Cash Receipts journal. Omit descriptions. Jan. 25 The account receivable of Damon Hess, amounting to $300, is determined to be uncollectible and is written off. Feb. 14 The account receivable of Heather Daye, amounting to $500, is determined to be uncollectible and is written off. July 3 Received $75 from Damon Hess in partial payment of his account, which had been written off in January. There is doubt that the balance of his account will be collected. Nov. 8 Received a check for $500 from Heather Daye in full payment of her account, which had been written off in February.

A firm reported net credit sales of $960,000 for the year and an Accounts Receivable balance of $120,000 at year-end. Prior to adjustments, Allowance for Doubtful Accounts has a debit balance of $820. The firm estimates its losses from uncollectible accounts to be one-half of 1 percent of net credit sales. - The entry to record the estimated losses from uncollectible accounts will include a credit to Allowance for Doubtful Accounts for

The longer an account is past due, the ________ likely it is to be collected.

Allowance for Doubtful Accounts has a debit balance of $700 at the end of the year, before adjustments. Sales for the year amounted to $920,000, sales discounts amounted to $31,200 and sales returns and allowances amounted to $42,300. -If the uncollectible accounts expense is estimated at 2% of net sales, the balance in the Allowance for Doubtful Accounts after the entry to record estimated losses from uncollectible accounts will be

When using the allowance method for accounting for uncollectible accounts, it takes ________ entries to record the collection of an account that was previously written off.

A firm reported sales of $450,000 for the year. Prior to adjustment, Allowance for Doubtful Accounts has a debit balance of $280. Based on an aging of accounts receivable, the firm estimated its losses from uncollectible accounts to be $3,980. The entry to record the estimated bad debt losses will be:

The entry to record the write-off of a specific uncollectible account using the allowance method includes a debit to ________.

A firm reported sales of $460,000 for the year. Prior to adjustment, Allowance for Doubtful Accounts has a credit balance of $560. Based on an aging of accounts receivable, the firm estimated its losses from uncollectible accounts to be $6,460. The adjusting entry to record the estimated bad debt losses will be: