Question: Goto Foods International Inc uses the aging of accounts receivable

Goto Foods International, Inc. uses the aging of accounts receivable method to account for bad debts at the end of each year. All of its customers are on account with the credit terms 2/10, n/30. Accounts receivable are grouped into three aging periods: (1) current—within the current month, (2) 31 to 60 days, and (3) 61+ days. Goto’s accounting policy for estimating the uncollectible accounts receivable is calculated based on (1) 5% on the current, (2) 10% on the 2nd aging period, and (3) 30% on the 3rd aging period.
At December 31, Goto Foods' accounts receivable was $92,800, and the unadjusted Allowance for Doubtful Accounts was $3,200 (Cr.). The following is a list of the accounts receivable subsidiary ledger for five customers:
1. Prepare the customer aging schedule based on the three aging groups.
2. Calculate the estimated uncollectible accounts for the year.
3. Prepare the journal entry for the bad debt expense.
4. Which company has taken the sales discounts? What was the amount of the sales discounts taken?

  • CreatedJuly 08, 2015
  • Files Included
Post your question