PB8-1 Recording Accounts Receivable Transactions Using the Allowance Method

Receivables, Bad Debe Expense, and Interest Revenue connedt GROUP B PROBLEMS ance Method ctions using its unadjusted trial balance ipman Sofware recently reported the following amounts in its unadjusted trial Credits 8- 2PB8-1 Recording Accounts Receivable Transactions Using the Allowance Meth Chipman Sofware year-end: Debits $3,000 Accounts Receivable Allowance for Doubtful Accounts Sales (assume all on credit) s 20 44,000 Required: Chipman uses of l percent ofsales to estimate its Bad Debt Expensefor the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. Assume instead that Chipman uses the aging of accounts receivable method and esti $80 of its Accounts Receivable will be uncollectible. Prepare the year-end adjusting journal entry for recording Bad Debt Expense. Repeat requirement 2, except this time assume Chipman's year-end unadjusted balance in Allowance for Doubtful Accounts was a debit balance of $20. 1. mates that 2. 3. If one of Chipman's main customers declared bankruptcy after year-end, what journal entry would be used to write off its $15 balance? 4. PB8-2 Interpreting Disclosure of Allowance for Doubtful Accounts Xerox Corporation is the company that made the photocopier popular, although it now describes itself as "the world's leading enterprise for business process and document management." It recently disclosed the following information concerning the Allowance for Doubtful Accounts on its Form 10-K annual report. SCHEDULE II Valuation and Qualifying Accounts dollars in millions) Allowance for Doubtful Accounts Balance at Beginning of Year Balance at Additions Charged to Bad Debt Expense Write- Offs 7017gihning of Year Bad Debtd toWriteBalance at