Using an aging schedule to account for bad debts

Assignment Help Accounting Basics
Reference no: EM131121587

Exercise 7-4 Using an Aging Schedule to Account for Bad Debts

Carter Company sells on credit with terms of n/30. For the $500,000 of accounts at the end of the year that are not overdue, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estimates the likelihood of collection going down to 70%. The probability of collecting the $100,000 of accounts more than a month past due is estimated to be 25%.

Required

1. Prepare an aging schedule to estimate the amount of uncollectible accounts.

2. On the basis of the schedule in part (1), prepare the journal entry at the end of the year to estimate bad debts. Assume that the credit balance in Allowance for Doubtful Accounts is $20,000.

Reference no: EM131121587

Questions Cloud

Accounting and auditing enforcement release : Obtain a copy of Accounting and Auditing Enforcement Release (AAER) No. 3146, issued by the SEC on June 24, 2010.
Find a pure strategy sub game perfect equilibrium : Find a pure strategy sub game perfect equilibrium, b, such that (p, b) is not sequentially rational for any system of beliefs p.
Lifefit products sells running shoes and shorts : Lifefit has total sales of $1 million per month, of which 80 percent result from the sale of run- ning shoes and the other 20 percent from the sale of shorts.
Describe various forms of internal and external threats : Describe various forms of internal and external threats to an organization. Describe methods to detect internal and external threats to the organization. Evaluate methods to protect the organization from internal and external threats.
Using an aging schedule to account for bad debts : Carter Company sells on credit with terms of n/30. For the $500,000 of accounts at the end of the year that are not overdue, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estima..
Major advantages and disadvantages of a business owner : Explain the major advantages and disadvantages of a business owner with minimal accounting experience maintaining the company's books instead of hiring an accountant.
Describe your rationale for selecting that topic in relation : Identify the Final Research Project topic. What influenced you to make this choice? Describe your rationale for selecting that topic in relation to your academic and career pursuits.
Accompany the payment of an invoice : 1. What three documents must accompany the payment of an invoice? Discuss where these three documents originate and the resulting control implications.
What accounts are decreased for the warranty work provided : Determine the warranty liability at January 31, the end of the first month of the current year. What accounts are decreased for the warranty work provided in February?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  You have decided that it might be a good idea to create a

you have decided that it might be a good idea to create a personal household budget for yourself. you know you are able

  Total overhead incurred amounted to 508400 budgeted fixed

straightforward variance analysis l.o. 5 arrow enterprises uses a standard costing system. the standard cost sheet for

  The building and equipment are estimated to cost 1200000

thurman munster the owner of adams family rvs is considering the addition of a service center his lot. the building and

  Quillen compnay is performing a post-audit of a project

quillen compnay is performing a post-audit of a project completed one year ago. the initial estimates were that the

  Wilton inc had net sales on 2012 of 1400000 at december 31

wilton inc had net sales on 2012 of 1400000. at december 31 2012 before adjusting entries the balances in selected

  Prepare the necessary adjusting journal entries assume no

the following information is available for cec company for the year ended december 31 20131. a three year insurance

  Time tickets for factory employees during the month of

time tickets for factory employees during the month of august are summarized as follows. prepare a journal entry to

  During its most recent fiscal year simon enterprises sold

during its most recent fiscal year simon enterprises sold 290000 electric screwdrivers at a price of 17.70 each. fixed

  A company has the choice of either selling 1000 defective

a company has the choice of either selling 1000 defective units as scrap or rebuilding them. the company could sell the

  Ds any trends in the net cash provided in

discuss any trends in the net cash provided in operating investing and financing activities for home depot and

  What conclusions can you make about the company based on

at the beginning of the month of december toler industries had the following balances in its trialbalanceaccount

  Ess essential company normally produces and sells 4000

ess essential company normally produces and sells 4000 video monitors for personal computers each month. variable

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd