Reference no: EM13858954
Problem 1: Information related to Mingenback Company for 2014 is summarized below.
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Total credit sales
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$2,404,000
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|
Accounts receivable at December 31
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859,000
|
|
Bad debts written off
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34,400
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What amount of bad debt expense will Mingenback Company report if it uses the direct write-off method of accounting for bad debts?
Assume that Mingenback Company estimates its bad debt expense to be 2% of credit sales. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $3,700?
Assume that Mingenback Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts credit balance of $2,700?
Assume that Mingenback Company estimates its bad debt expense based on 5% of accounts receivable. What amount of bad debt expense will Mingenback record if it has an Allowance for Doubtful Accounts debit balance of $2,700?
Problem 2: Presented below is an aging schedule for Halleran Company.
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|
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Number of Days Past Due
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|
Customer
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Total
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Not
Yet Due
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1-30
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31-60
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61-90
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Over 90
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Anders
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$ 24,100
|
|
$11,000
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$13,100
|
|
|
|
Blake
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41,500
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$ 41,500
|
|
|
|
|
|
Coulson
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57,000
|
16,400
|
5,300
|
|
$35,300
|
|
|
Deleon
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34,500
|
|
|
|
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$34,500
|
|
Others
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131,800
|
94,300
|
16,700
|
14,600
|
|
6,200
|
|
$288,900
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$152,200
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$33,000
|
$27,700
|
$35,300
|
$40,700
|
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Estimated Percentage Uncollectible
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|
2%
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6%
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12%
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26%
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52%
|
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Total Estimated Bad Debts
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$ 38,690
|
$ 3,044
|
$ 1,980
|
$ 3,324
|
$ 9,178
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$21,164
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At December 31, 2014, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $11,940.
Journalize and post the adjusting entry for bad debts at December 31, 2014.
Journalize and post to the allowance account the following events and transactions in the year 2015.
(1) On March 31, a $1,210 customer balance originating in 2014 is judged uncollectible.
(2) On May 31, a check for $1,210 is received from the customer whose account was written off as uncollectible on March 31.
Journalize the adjusting entry for bad debts on December 31, 2015, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $820 and the aging schedule indicates that total estimated bad debts will be $28,800.
Problem 3: Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end.
(a). Calculate the total estimated bad debts
(b) Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in
(a). Assume the current balance in Allowance for Doubtful Accounts is a $8,300 debit.
(c) Of the above accounts, $5,400 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.
(d) The company collects $5,400 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.
Problem 4: Farwell Company closes its books monthly. On September 30, selected ledger account balances are:
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Notes Receivable
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$39,300
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|
Interest Receivable
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242
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Notes Receivable include the following.
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Date
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Maker
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Face
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Term
|
Interest
|
|
Aug. 16
|
K. Goza Inc.
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$ 16,800
|
60 days
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8%
|
|
Aug. 25
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Holt Co.
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10,500
|
60 days
|
7%
|
|
Sept. 30
|
Noblitt Corp.
|
12,000
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6 months
|
9%
|
Interest is computed using a 360-day year. During October, the following transactions were completed.
Oct. 7 Made sales of $7,000 on Farwell credit cards.
12 Made sales of $900 on MasterCard credit cards. The credit card service charge is 2%.
15 Added $500 to Farwell customer balances for finance charges on unpaid balances.
15 Received payment in full from K. Goza Inc. on the amount due.
24 Received notice that the Holt note has been dishonored. (Assume that Holt is expected to pay in the future.)
Journalize the October transactions and the October 31 adjusting entry for accrued interest receivable.
Show the balance sheet presentation of the receivable accounts at October 31.