Batterman, Inc uses the Allowance Method to estimate bad debts The balance in Allowance for Doubtful Accounts
Question:
Batterman, Inc uses the Allowance Method to estimate bad debts
The balance in Allowance for Doubtful Accounts was $800,000 on January 1, 2020
During 2020, Batterman, Inc performed internal audit services
An aging of accounts receivable was prepared for the first time as of December 31, 2020
A summary of the aging (before adjustments below) is as follows
Classification by Month of Sale Balance in Each Category Estimated Uncollectible
OctoberDecember 2020 1,321,000 5
JulySeptember 223,000 12
JanuaryJune 657,000 28
Prior to 1120 2,475,000 75 4,676,000
Additional Information
Receivables from 2012 totaling $695,300 were written off as of December 31, 2020
A credit balance exists in Accounts Receivable (JanJune) for $120,780, which represented an unpaid electric bill Additional cash collections were received from accounts (JanJune) previously written off for $35,720
Cash collections were processed late in December 2020 for 325,000
Prepare the journal entries for the adjustments above
Calculate the Bad Debt Expense for 2020 (after adjustments)
Prepare the journal entry to record the 2020 adjustment to the Allowance for Doubtful Accounts
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura