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    mraz_fan's Avatar
    mraz_fan Posts: 9, Reputation: 1
    New Member
     
    #1

    Jul 31, 2009, 04:58 PM
    Accounts receivables ! Exam soon!
    :D Hi ! I did the first 2 parts of the question, but can't get C & D :confused: Can someone please show me how to do it!

    --------------------------------------…
    [B]ABC Inc. generated $2.5 million in credit sales during the current year. Based on past experience, it is estimated that 1.5% of all credit sales will probe to be uncollectible. The balance of the allowance for doubtful accounts at December 31 is $6,900 credit before the year end adjustment for uncollectible accounts. Account receivable at December 31 consists of the follow:


    Account Classification - Amount:

    Current - $1,900,000
    1-30 days past due - 150,000
    31-60 days past due - 90,000
    61-90 days past due - 50,000
    Over 90 days past due - 20,000


    a) Calculate bad debts expense and record the related journal entry for the current year using the percentage of credit sales method.

    b) ABC has decided to write off all accounts that were over 90 days past due. Record the journal entry.

    c) Show how Accounts Receivable will be presented on the Dec 31 balance sheet, with appropriate account balances, following the above adjustments. (HELP!! )

    d) One of the customers whose $3000 accountat was written off paid in full. Record the journal entry. (HELP! )[/B

    ]--------------------------------------…
    ///////My Answers//////

    a) Bad debt expense = .015 x 2,500,000 = $37500

    Journal Entry:
    Debit: Bad Debt Expense 37500
    Credit: Allowance for Doubtful Accounts 37500

    b) Journal Entry:
    Debit: Allowance for Doubtful Accounts 20000
    Credit: Accounts Receivable 20000






    Please someone help me with part c and d! Also can someone check if part a and b are right?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #2

    Jul 31, 2009, 09:38 PM

    It really helps if you don't post the same thing twice - gets answered one place and someone else doesn't know, gets confusing. Stick to the other thread:
    https://www.askmehelpdesk.com/financ...ts-382110.html

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