Write Debit and Credit Amounts With Their Amounts: A) Chainz Co. uses the Allowance Method to account
Question:
Write Debit and Credit Amounts With Their Amounts:
A) Chainz Co. uses the Allowance Method to account for uncollectible accounts. Past experience indicates that 5.5% of Accounts Receivable will be uncollectible.
- Allowance for Doubtful Accounts has a $9,500 credit balance.
- Accounts Receivable for the year ended December 31, 2021, was $5,680,000.
12/31/21 - Prepare the adjusting entry at the end of the year to record estimated bad debt.
B) The company's Accounts Receivable include a $7,750 balance due from S. Shortcake. The company uses an Accounts Receivable subsidiary ledger.
On 3/15/2022 the account of S. Shortcake was deemed to be uncollectible and should be written off.
Prepare the appropriate journal entry to show this write-off.
C) S. Shortcake received an inheritance on 7/31/22 and brings $7,750 cash to Chainz Co. for the amount previously owed.
Prepare the entry(ies) to appropriately record the cash.
D) At year-end Yeti Supplies, has the following account balances:
- Accounts Receivable: $450,000
- Allowance for Doubtful Accounts: $2,275 debit balance (before any adjustment)
It is estimated that bad debts will be 6.25% of Accounts Receivable. Prepare the adjusting entry at the end of the year to record the estimated bad debt.
E) Show the Allowance for Doubtful Accounts T-account for the Yeti Company with all the entries and ending balances for the year.
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso