Solution-What is the appropriate balance for allowance

What is the appropriate balance for allowance

Assignment Help Accounting Basics

Reference no: EM132053303

Question - Bad-Debt Reporting-Aging

Manilow Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Manilow's Accounts Receivable account was $555,000 and Allowance for Doubtful Accounts had a credit balance of $40,000. The year-end balance reported in the balance sheet for Allowance for Doubtful Accounts will be based on the aging schedule shown below.

Days Account Outstanding	Amount	Collection Probability
Less than 16 days	$300,000	0.98
Between 16 and 30 days	$100,000	0.90
Between 31 and 45 days	$80,000	0.85
Between 46 and 60 days	$40,000	0.80
Between 61 and 75 days	$20,000	0.55

Instructions -

(a) What is the appropriate balance for Allowance for Doubtful Accounts at year-end?

(b) Show how accounts receivable would be presented on the balance sheet.

Reference no: EM132053303

Questions Cloud

What is the yield to the investor who holds the bonds : If $10000(the face value) worth of these bonds are purchased now, what is the yield to the investor who holds the bonds for 10 years

Sales growth without any additional funds needed : A company wants to maximize their sales growth without any additional funds needed (AFN).

Prepare a schedule showing the amount of gross profit : Prepare a schedule showing the amount of gross profit that Tarlo recognizes each year using the percentage-of-completion method

Compute realized rate of return for an investor : Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

What is the appropriate balance for allowance : Question - Bad-Debt Reporting-Aging. What is the appropriate balance for Allowance for Doubtful Accounts at year-end

Assume expected-value decision maker : Solve a decision tree to calculate what the oil producer should do immediately, You should assume an expected-value decision maker.

How many pounds must be sold to earn a profit : How many pounds must be sold to break even, and how many pounds must be sold to earn a profit of 10,000 per month?

Compute the profit or loss for each year : Forman Company has contracted to build a dam over a period of 4 years for $3,000,000. Compute the profit or loss for each year

Explore issues that arab and muslim clients may face : For this week's Discussion, you explore issues that Arab and Muslim clients may face, whether they are established or recently immigrated, more traditional.

User Account

All Pages

What is the appropriate balance for allowance

Reference no: EM132053303

Reference no: EM132053303

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT