Ask Experts Questions for FREE Help !
Ask
    sj7085's Avatar
    sj7085 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 13, 2009, 07:43 PM
    Accounting balance in the allowance account
    Assuming that instead of basing the provision for uncollectible accounts on an analysis of receivables, the adjusting entry of December 31st had been based on on an estimated expense of 1/4 of 1% of the net sales of $7,126,000 for the year.

    I have figured the Bad Debt expense to be $17815??

    I need to figure the Allowance account.. I know I should be subtracting two items for this and believe one of them is the bad debt expense of $17815, but that is as far as I can get. HELP!
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #2

    Apr 13, 2009, 10:31 PM
    I have figured the Bad Debt expense to be $17815??
    This is correct.

    I need to figure the Allowance account.. I know I should be subtracting two items for this and believe one of them is the bad debt expense of $17815, but that is as far as I can get. HELP!
    You're mixing this up with the other method, and it's not always a subtraction even in that method. In the analysis of receivables method, the number of the estimated uncollectibles is the ending balance you want to have in the Allowance account, so you have to figure out what entry into the account would create that ending balance.

    But in the % of sales method, that answer you got (17815) is not an ending balance. It's the actual number for the entry itself. That is, this is what you are going to credit to the Allowance account. If all you need is the entry, you're done with the math. If you need to then balance the account, credit this to whatever's already there and just balance like you'd balance any other account.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Accounting need assistance with adjusted trial balance, doesn't balance [ 3 Answers ]

1. Office supplies on hand at year end amounted to $ 420 2. The equipment costing $30,000 has an expected life of six years and no salvage value. Mike uses straight-line depreciation. 3. A premium of $ 1500 for a one year insurance policy was paid on November 1. 4. Wages earned by employees but...

Allowance for Uncollectibles account [ 3 Answers ]

Unadjusted Trial Balance Sales $600,000 Ending Accounts Receivable 180,000 Ending Allowance for Uncollectibles 6,200 CR Bad Debt Expense 5,000 Estimated...

Debit balance in Allowance for doubtful accounts account [ 1 Answers ]

If the balance in the Allowance for doubtful accounts is a credit of lets say 1,500, we would record the following on the balance sheet: Current assets: Accounts Receivable... 10,000 Less: Allowance for doubtful accounts... 1,500 ...

Computing the ending balance in the allowance for uncollectable accounts? [ 1 Answers ]

I am looking for help with the following questions, I have myself very confused with the credits/debits, can someone help with these study questions and explain how the answer is arrived at:confused: :confused: Would the answer for a) be $2,320? Compute the ending balance in the allowance for...

Allowance for Doubtful Accounts and a Balance Sheet [ 4 Answers ]

I have the following question and I can not seem to find an example and would just like some help. On December 31, of the current year, a campanies unadjusted trial balance reveled the following: Accounts Receivable $185,600; Sales Revenue $1,280,000; (75% were on credit), Allowance for Doubtful...

View more questions Search