From its first day of operations to December 31, 2017, Ayayai Corp. provided for uncollectible accounts...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
From its first day of operations to December 31, 2017, Ayayai Corp. provided for uncollectible accounts receivable under the allowance method: entries for bad debt expense were made monthly based on 2.10% of credit sales, bad debts that were written off were charged to the allowance account, recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments were made to the allowance account. Ayayai's usual credit terms were net 30 days, and remain unchanged. The balance in Allowance for Doubtful Accounts was $183,800 at January 1, 2017. During 2017, credit sales totalled $9.20 million, interim entries for bad debt expense were based on 2.10% of credit sales, $95,500 of bad debts were written off, and recoveries of accounts previously written off amounted to $14,500. Ayayai upgraded its computer facility in November 2017, and an aging of accounts receivable was prepared for the first time as at December 31, 2017. A summary of the aging analysis follows: Classification by Month of Sale November-December 2017 July-October 2017 January-June 2017 Before January 1, 2017 Balance in Each Category Estimated % Uncollectible $1,098,000 9% 632,000 12.5% 416,500 20% 58% 158,000 $2,304,500 Based on a review of how collectible the accounts really are in the "Before January 1, 2017" aging category, additional receivables totalling $65,000 were written off as at December 31, 2017. The 58% uncollectible estimate therefore only applies to the remaining $93,000 in the category. Finally, beginning with the year ended December 31, 2017, Ayayai adopted a new accounting method for estimating the allowance for doubtful accounts: it now uses the amount indicated by the year-end aging analysis of accounts receivable. Calculate bad debt expense accrual and year end balance for the year ended December 31, 2017. (Hint: In calculating the allowance amount at December 31, 2017, subtract the $65,000 write off of receivables.) Bad debt expense accrual $1 Calculate bad debt expense accrual and year end balance for the year ended December 31, 2017. (Hint: In calculating the allowance amount at December 31, 2017, subtract the $65,000 write off of receivables.) Bad debt expense accrual $ Year End Balance SHOW LIST OF ACCOUNTS $ Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as at December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation (To record adjustment resulting from a change in accounting estimate) SHOW LIST OF ACCOUNTS Debit Credit From its first day of operations to December 31, 2017, Ayayai Corp. provided for uncollectible accounts receivable under the allowance method: entries for bad debt expense were made monthly based on 2.10% of credit sales, bad debts that were written off were charged to the allowance account, recoveries of bad debts previously written off were credited to the allowance account, and no year-end adjustments were made to the allowance account. Ayayai's usual credit terms were net 30 days, and remain unchanged. The balance in Allowance for Doubtful Accounts was $183,800 at January 1, 2017. During 2017, credit sales totalled $9.20 million, interim entries for bad debt expense were based on 2.10% of credit sales, $95,500 of bad debts were written off, and recoveries of accounts previously written off amounted to $14,500. Ayayai upgraded its computer facility in November 2017, and an aging of accounts receivable was prepared for the first time as at December 31, 2017. A summary of the aging analysis follows: Classification by Month of Sale November-December 2017 July-October 2017 January-June 2017 Before January 1, 2017 Balance in Each Category Estimated % Uncollectible $1,098,000 9% 632,000 12.5% 416,500 20% 58% 158,000 $2,304,500 Based on a review of how collectible the accounts really are in the "Before January 1, 2017" aging category, additional receivables totalling $65,000 were written off as at December 31, 2017. The 58% uncollectible estimate therefore only applies to the remaining $93,000 in the category. Finally, beginning with the year ended December 31, 2017, Ayayai adopted a new accounting method for estimating the allowance for doubtful accounts: it now uses the amount indicated by the year-end aging analysis of accounts receivable. Calculate bad debt expense accrual and year end balance for the year ended December 31, 2017. (Hint: In calculating the allowance amount at December 31, 2017, subtract the $65,000 write off of receivables.) Bad debt expense accrual $1 Calculate bad debt expense accrual and year end balance for the year ended December 31, 2017. (Hint: In calculating the allowance amount at December 31, 2017, subtract the $65,000 write off of receivables.) Bad debt expense accrual $ Year End Balance SHOW LIST OF ACCOUNTS $ Prepare the journal entry for the year-end adjustment to the Allowance for Doubtful Accounts balance as at December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation (To record adjustment resulting from a change in accounting estimate) SHOW LIST OF ACCOUNTS Debit Credit
Expert Answer:
Answer rating: 100% (QA)
Bad debt expense accrual is 84060 Required allownace balance M... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
Posted Date:
Students also viewed these accounting questions
-
From its first day of operations to December 31, 2017, Campbell Corporation provided for uncollectible accounts receivable under the allowance method: entries for bad debt expense were made monthly...
-
From its first day of operations to December 31, 2014, Campbell Corporation provided for uncollectible accounts receivable under the allowance method: entries for bad debt expense were made monthly...
-
From its first day of operations to December 31, 2020, Campbell Corporation provided for uncollectible accounts receivable under the allowance method: 1. Entries for bad debt expense were made...
-
a1a2 (d) Suppose a Cobb Douglass production function with two inputs and exponents inside the production function y = xx22 that are less than one. Derive the profit maximizing choices of x1, x2, andy...
-
Examine the statement of cash flows of Clock, Inc. Suppose Clocks operating activities provided, rather than used, cash. Identify three things under the indirect method that could cause operating...
-
Clapper Electronics produces two models of telephone-answering devices, model 102 (X1) and model H23 (X12) Jim Clapper, vice president for production, formulates their constraints as follows: 2X1 +...
-
Visit http://www.law.cornell.edu. Click on "Constitutions and Codes," then "Other Uniform Laws." Select a state from "state list". Then click on "Judicial Opinions." Search for a case concerning...
-
Putnam Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials1 pound plastic at $7.00 per pound ....$ 7.00 Direct labor1.5 hours at $12.00...
-
Assume that the historical average return on Canadian common stocks between 1957 and 2019 is 10.29%, with a standard deviation of 16.41%. This tells us that if we bought Canadian stocks during this...
-
An unknown compound gives the following mass, IR, and NMR spectra. Propose a structure, and show how it is consistent with the spectra. Show the fragmentations that give the prominent peaks at m/z...
-
The S&R index level is 900 at t=0. The dividend yield is 3% p.a. continuously compounded and the risk-free rate is 5% continuously compounded. (a) What is the theoretical forward price with a...
-
what are key features of public sociology that sets it aside from professional sociological approaches to the understanding of work.
-
Find the minimum and maximum values of z=2x+7y, if possible, for the following set of constraints. x+y6 -x+y2 2x-y8 Select the correct choice below and, if necessary, fill in the answer box to...
-
Briefly explain what is meant by the term public sociology.? Look at the news regarding the economic situation of the country since the pandemic --who has lost and who has gained? What groups and...
-
How do change agents navigate the intricate interplay of cognitive biases, socio-cultural dynamics, and systemic inertia when orchestrating interventions aimed at catalyzing organizational...
-
calculate orbital parameters using Kepler's Third Law (P' 2 = a 3 ). 1) Scientists just discovered a new comet that orbits the Sun once every 540 years. a) What is the semi-major axis of this comet...
-
A researcher compared the average time (in minutes) spent exercising over a week for a sample of seniors in an assisted living facility with the average found from a national survey of those over 65...
-
Extend Algorithms 3.4 and 3.5 to include as output the first and second derivatives of the spline at the nodes.
-
On June 30, 2014, your client, Bearcat Limited, was granted two patents for plastic cartons that it had been producing and marketing profitably for the past three years. One patent covers the...
-
On June 3, Arnold Limited sold to Chester Arthur merchandise having a sale price of $3,000 with terms 3/10, n/60, f.o.b. shipping point. A $90 invoice, terms n/30, was received by Chester on June 8...
-
The following accounts appeared in the December 31 trial balance of the Majestic Theatre: Instructions (a) From the account balances above and the information that follows, prepare the annual...
-
Question: Hortense and Gus are each starting a business. Hortense's business is an Internet startup. Gus will be opening a yarn store. Hortense needs millions of dollars in venture capital and...
-
1. ETHICS Lee McNeely told Hardee's officials that he was interested in purchasing multiple restaurants in Arkansas. A Hardee's officer assured him that any of the company-owned stores in Arkansas...
-
Question: In which one or more of the following forms of organization is it true that none of the partners are liable for the debts of the partnership? A. General partnership B. Limited liability...
Study smarter with the SolutionInn App