On December 31, 2019, Donna Wholesale reported the following amounts and account balances (before adjustments): Accounts Receivable
Question:
On December 31, 2019, Donna Wholesale reported the following amounts and account balances (before adjustments): Accounts Receivable Allowance for Doubtful Accounts, credit Net Sales $ 100,000 4,000 500,000
1. Donna Wholesale estimates that its bad debt expense is 1.5% of net sales. The bad debt expense for 2019 should be:
2.Donna Wholesale uses an aging schedule to estimate its uncollectible accounts. The aging of accounts receivable and the percentage of each category that is estimated to be uncollectible is: i. Current $ 50,000 2% ii. 1 - 30 days past due 30,000 5% iii. Over 30 days past due 20,000 30% The balance in the Allowance for Doubtful Accounts after the adjustment should be:
3. Using your calculations from Question 4, the adjustment to the Allowance for Doubtful Accounts should be a credit .
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield