The A.T. Cross Company is well known for its Cross pens. The company recently re
ID: 2549577 • Letter: T
Question
The A.T. Cross Company is well known for its Cross pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31.
Prepare the adjusting journal entry required at December 31 for recording Bad Debt Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(ii) Assume instead that Cross uses the aging of accounts receivable method and estimates that $1,007,000 of Accounts Receivable will be uncollectible.
TIP: The aging of accounts receivable method focuses on calculating what the adjusted Allowance for Doubtful Accounts balance should be. You need to consider the existing balance when determining the adjustment.
(1)Record the entry for bad debt expenses under the percentage of credit sales method
(2)Record the entry for bad debt expenses under the aging of accounts receivable method.
(3)Assume instead that Cross uses the aging of accounts receivable method and estimates that $1,007,000 of Accounts Receivable will be uncollectible and unadjusted balance in Cross’s Allowance for Doubtful Accounts at December 31 was a debit balance of $10,050. Prepare the adjusting journal entry required at December 31 for recording bad debt expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(3)Record the adjusting entry for bad debts as of december 31, using the aging of accounts receivable method
(4)If one of Cross’s main customers declared bankruptcy, what journal entry would be used to write off its $10,000 balance? (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
(4) Record the write-off of a $10,000 customer account, which is not collectible due to bankruptcy.
The A.T. Cross Company is well known for its Cross pens. The company recently reported the following amounts in its unadjusted trial balance as of December 31.
Explanation / Answer
JOURNAL ENTRIES DATE ACCOUNTS TITLE AND EXPLANATIONS DEBIT $ CREDIT $ CASE-1 Bad Debts expense Dr. (158312,000*0.75%) 1,187,340 Allowance for uncollectibles Accounts 1,187,340 CASE-2 Bad debts expense Dr. 55000 Allowance for uncollectible Accounts 55000 Note: Allowance required to created: Uncollectibles estimated 1,007,000 Less: Allowance beginning balance 952,000 Allowance balance to be created 55,000 Case-3 Bad debts expense Dr. 1,017,050 Allowance for uncollectible Accounts 1,017,050 Note: Allowance required to created: Uncollectibles estimated 1,007,000 Add: Debit balance of Allowance 10,050 Allowance balance to be created 1,017,050 Case-4 Allowance for uncollectibles Accounts 10,000 Accounts recievable 10,000
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