The statement of financial position (balance sheet) of Advanced Technologies at

Question

The statement of financial position (balance sheet) of Advanced Technologies at 30 June 2016 reported the following:

Accounts receivable……………………………………………… $1,060,000

Allowance for doubtful accounts (credit balance)…………...... 21,600

At the end of the year, Advanced Technologies ages its accounts receivable and then adjusts the balance in the allowance for doubtful account to correspond to the aging schedule. During the year ended 30 June 2017, Advanced Technologies completed the following transactions:

Jul 14 Wrote off account receivable as uncollectible:

Grace Wong, $2,800; Design Inc., $9,600; and SM Chung,$400

Nov 22 Wrote off accounts receivable as uncollectible:

Tommy Chan, $5,200; Kathy Li, $8,400; and Beta Group, $2,800

Jun 30 Recorded uncollectible-account expense based on the aging of receivables.

Age of Accounts as at 30 June 2017

Required

a) Record the transactions in the journal.

b) Open the allowance for doubtful accounts, and post entries affecting that account. Keep a running balance.

c) Show how Advanced Technologies should report accounts receivable on its statement of financial position (balance sheet) at 30 June 2017.

Total 1– 30 days 31–60 days 61–90 days Over 90 days 1,020,000 $480,000 $320,000 $160,000 $60,000 Percentage of uncollectible 0.5% 1.0% 4% 50%

Explanation / Answer

a)

Bad debts expense

[42000 + (12800 +16400 - 21600{beginning allowance})]

Note:- Aging of receivables

b.)    Allowance for doubtful accounts

c) Current assets:

Accounts receivable 1,020,000

less: allowance for doubtful accounts 42000

               $978000

Date Accounts title Dr. Cr. Jul 14, 2017 Allowance for doubtful accounts 12800 To Accounts receivable- Grace Wong $2,800    To Accounts receivable- Design Inc $9,600    To Accounts receivable- SM Chung $400 Nov 22,2017 Allowance for doubtful accounts 16400    To Accounts receivable- Tommy Chan $5,200 To Accounts receivable- Kathy Li $8,400 To Accounts receivable- Beta Group $2,800 Jun 30,2017

Bad debts expense

[42000 + (12800 +16400 - 21600{beginning allowance})]

49600 To allowance for doubtful accounts 49600

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.