On December 31, the unadjusted trial balance of Lee’s Coffee Distributor contain
ID: 2435178 • Letter: O
Question
On December 31, the unadjusted trial balance of Lee’s Coffee Distributor contains the following:
Debit
Credit
Accounts Receivable
240,000
Allowance for Doubtful Accounts
3,000
Cash Sales
1,500,000
Credit Sales
950,000
The A/R subsidiary ledger yields the following aging [terms are 1/10, n/30] and subsequent analysis:
Total
Current
1-30 days past due
31-60 days past due
61-90 days past due
More than 90 days past due
$240,000
110,000
60,000
30,000
10,000
30,000
Write-off percentage
1.50%
4.00%
7.00%
10.00%
25.00%
Estimated write-off
Early the next year, an invoice for $2,000 to "Stardoes Coffee Shop" is determined to be uncollectible. Which one of the following statements is correct (true)?
A. The write-off would include a credit to A/R for $2,000
B. The write-off of the invoice would include a debit to "bad debt expense" for $2,000
C. no entry is needed at this time
D. If the invoice came from the 61-90 past due category, the write-off would include a debit to the "allowance for doubtful accounts" for $200
Debit
Credit
Accounts Receivable
240,000
Allowance for Doubtful Accounts
3,000
Cash Sales
1,500,000
Credit Sales
950,000
Explanation / Answer
Early the next year, an invoice for $2,000 to "Stardoes Coffee Shop" is determined to be uncollectible. Which one of the following statements is correct (true)? A. The write-off would include a credit to A/R for $2,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.