Title | 5709 BDE - business debt expense |
---|---|
Author | Annie Li |
Course | Introduction to Financial Accounting |
Institution | University of Southern California |
Pages | 1 |
File Size | 56.8 KB |
File Type | |
Total Downloads | 9 |
Total Views | 159 |
business debt expense...
Uncollectible Accounts Receivable: [5709] Amanda Company sells only on account and had a balance in its Accounts Receivable [AR] account at the start of Year 2 of $1,100. The balance in the Allowance for Uncollectible Accounts [AUA] at the start of Year 2 was $85. Bad Debt Expense for Year 1 had been $120. In Year 2, the firm had credit sales of $8,800 and collections on account of $7,700. Write-offs and recoveries of previous write-offs in Year 2 were $420 and $40, respectively. In Year 3, the firm had credit sales of $9,600 and collections on account of $9,500. Write-offs and recoveries of previous write-offs in Year 3 were $540 and $70, respectively. When using the percentage of sales method, assume that Amanda has properly estimated that 5% of its credit sales in Years 2 and 3 will be uncollectible. Alternatively, when using the aging method, assume the firm had estimated at the end of Year 1 that $1,015 of its AR would be collectible. One year later, at the end of Year 2, the firm’s management properly estimated that the firm would not be able to collect $170 of its AR. At the end of Year 3, the firm estimated that the firm would be able to collect $1,165 of its AR balance. Required: $______Determine the balance in the AUA account for Amanda at the end of Year 2 when using the percentage of sales method.
$______Determine the carrying value of AR for Amanda at the end of Year 3 when using the percentage of sales method
$______Determine the balance in AUA for Amanda at the end of Year 3 when using the aging method.
$______Determine the Bad Debt Expense for Amanda for Year 3 when using the aging method....