Question

At 31 December 20X9, the end of the annual reporting period, the accounts of Huron Company showed the following:
a. Sales revenue for 20X9, $ 2,950,000, of which one- quarter was on credit.
b. Allowance for doubtful accounts, balance 1 January 20X9, $ 22,700 credit.
c. Accounts receivable, balance 31 December 20X9 (prior to any write- offs of uncollectible accounts during 20X9), $ 383,400.
d. Uncollectible accounts to be written of, 31 December 20X9, $ 19,800. These accounts are all in the “past due over 90 days” category.
e. Aging schedule at 31 December 20X9, showing the following breakdown of accounts receivable ( prior to any write- offs of uncollectible accounts during 20X9):
Status Amount
Not past due ............ $ 210,800
Past due 1– 60 days ......... 60,000
Past due over 60 days......... 89,100
Past due over 90 days ......... 23,500

Required:
1. Give the 20X9 entry to write of the uncollectible accounts.
2. Give the 20X9 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates:
a. On credit sales, 1.8%.
b. On total receivables at year- end ( after write- of ), 4.2%.
c. On aging schedule: not past due, 0.8%; past due 1– 60 days, 1.8%; past due over 60 days, 11%, and past due over 90 days, 80%.
3. Show the amount that would be reported on the 20X9 statement of financial position relating to net accounts receivable for each assumption.



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  • CreatedFebruary 17, 2015
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