Question: Notes: Direct write-off method: records bad debt expense only when an account is judged to be worthless Allowance method: records bad debt expense by estimating

Notes:

Direct write-off method: records bad debt expense only when an account is judged to be worthless

Allowance method: records bad debt expense by estimating uncollectible accounts at the end of the accounting period

--On August 31, Target Inc. had an unadjusted credit balance of $1,500 in its Allowance for Uncollectible Account. An analysis of Target Inc.s accounts receivables revealed the following: (Target Inc. uses the aging of receivables method to estimate its bad debt expense)

Age (days) Amount Estimated as Uncollectible

0-30 $60,000 5%

31-60 $ 4,000 10%

> 60 $ 2,000 70%

What amount should Target Inc. report as Allowance for Uncollectibles on its 12/31^st Balance Sheet?

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--HEB Inc. determined the Net value of its Accounts Receivables on 12/31/15. The company uses the aging of receivables method to estimate Bad Debt Expense. The following is important information:

1/1/15. Allowance for Uncollectibles.....$ 30,000

Uncollectible accounts written off during 2015$ 18,000

Uncollectible accounts recovered during 2015.$ 2,000

Accounts Receivables, net on 12/31/15.$350,000

In 2015 what was HEB Inc.s Bad Debt Expense?

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--On 1/1/2014, Pyro Inc. had a credit balance of $260,000 in its Allowance for Uncollectible accounts. Based on past experience, 2% of Pyro Inc.s credit sales have been uncollectible. During 2014, Pyro Inc. wrote off $325,000 of uncollectible accounts. Credit sales for 2014 were $9,000,000.

On 12/31/14, what amount should Pyro Inc. report on its Balance Sheet as Allowance for Uncollectible Accounts?

________________________________________

--On 12-31-12, Target Inc.s balance sheet reported Accounts Receivable of $100,000 before Allowance for Uncollectibles of $10,000. Credit sales during 2013 were $611,000 and collections from customers were $591,000. During 2013, Accounts Receivables of $45,000 were written off and $17,000 were recovered. On 12-31-13, Ginger Inc. estimated that $15,000 of its Accounts Receivables were uncollectible.

What amount should Ginger Inc. report as Accounts Receivables on 12/31/13?

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--H3H3 Co., had Credit sales of $10,000,000 in 2011. The company also had a year-end balances in its Accounts Receivables and Allowance for Uncollectibles accounts of $300,000 and $50,000 respectively. H3H3 Co., used 3% of Accounts Receivables to determine it Allowance for Uncollectible accounts at year-end.

By what amount should H3H3 Co., adjust Allowance for Uncollectible accounts on 12-31-11?

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