Au Acct I Exam 2 Summer 2018 problems (1) Table Tools Insert Draw Design Layout

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Au Acct I Exam 2 Summer 2018 problems (1) Table Tools Insert Draw Design Layout References Mailings Review View Help Design Layout Tell me what you want to do Home d% Cut E Copy File Share Find epace Select EditingVoice Paste Heading 3 1 Nonmal T No Spac... Heading 1 Heading 2 Heading 4 Title Dictate Format Painter B IU - abe x Clipboard Font Paragraph Styles Navigation Sesrch document 1. A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current year, an aging analysis of accounts receivable revealed the following Required: a. Calculate the amount of the allowance for doubtful accounts that should be reported on December 31 Headings Pages Results Howard University School of Business Accounts Estimated ncollectible 0.8% Estimated ncollectible Summer 2018 Accounting Principles 201- O. Examination 2 (100 Total Points) Chapters 4-7 ccount Age S 500,000Not due yet 270.000 1-30 days overdue 145,000 31-60 days overduc 55,000 61-90 days over 2.00091-120 days oVerdue 18.000 Over 120 days overdue 8.0% 10.0% 30.0% 50.0% Total b. Calculate the amount of the bad debts expense that should be reported on the current year's income stat assuming that the balance in the allowance for doubtful accounts was $4,400 Page 2 of 13 1304 words ? + 100% ?? F o°??@???M w a A,a ^o ??7me 7-32 PM 7/16/2018 O Type here to search t

Explanation / Answer

Solution 1a:

Solution 1b:

Beginning balance of allowance for doubtful accounts = $4,400 Debit

Bad debts expense to be reported in current year income statement = Estimated uncollectibles + Beginning debit balance of allowance for doubtful accounts = $47,800 + $4,400 = $52,200

Solution 1c:

Solution 1d:

Beginning balance of allowance for doubtful accounts = $9,800 Credit

Bad debts expense to be reported in current year income statement = Estimated uncollectibles - Beginning credit balance of allowance for doubtful accounts = $47,800 + $9,800 = $38,000

Solution 1e:

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Computation of Allowance for doubtful accounts to be reported on Dec 31 Accounts Receivables Account Age Estimated Uncollectible % Estimated uncollectibles $500,000.00 Not Yet due 0.8% $4,000.00 $270,000.00 1-30 days overdue 3.0% $8,100.00 $145,000.00 31-60 days overdue 8.0% $11,600.00 $55,000.00 61-90 days overdue 10.0% $5,500.00 $32,000.00 91-120 days overdue 30.0% $9,600.00 $18,000.00 Over 120 days overdue 50.0% $9,000.00 Total $47,800.00

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