142.Discount Mart utilizes the allowance method of accounting for uncollectible receivables. On December 12 thecompany receives a $550 check from Chad Thomas in settlement of Thomas’s $1,100 outstanding accountsreceivable. Due to Thomas’s failing health he is closing his company and is expecting to make no further paymentsto Discount Mart. Journalize this declaration.
143.On June 30 (the end of the period), Brown Company has a credit balance of $2,275 in Allowance for DoubtfulAccounts. An evaluation of accounts receivable indicates that the proper balance should be $30,025. Journalize theappropriate adjusting entry.
144.a) The aging of Torme Designs' accounts receivable is shown below. Calculate the amount of each periodicityrange that is deemed to be uncollectible.
|
Est. Uncollectible Accts
|
Age Interval:
|
Balance:
|
Percentage:
|
Amount:
|
Not past due
|
850,000
|
3.50%
|
|
1~30 days past due:
|
47,500
|
5.00%
|
|
31~60 days past due:
|
21,750
|
10.00%
|
|
61~90 days past due:
|
11,250
|
20.00%
|
|
91~180 days past due:
|
5,065
|
30.00%
|
|
181~365 days past due:
|
2,500
|
50.00%
|
|
Over 365 days past due:
|
1,145
|
95.00%
|
|
Total:
|
939,210
|
|
|
|
|
|
|
b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry forthe bad debt expense for the year.
145.For each of the following scenarios, indicate the amount of the adjusting journal entry for bad debt expense to berecorded, the balance in allowance for doubtful accounts after adjustment at December 31, and the net realizablevalue of accounts receivable at December 31.
a) Based on an analysis of Simmon’s Company’s $380,000 balance in Accounts Receivable at December 31, itwas estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for DoubtfulAccounts before adjustment.
b)Blake Company had net credit sales of $900,000 at year-end, and has an Accounts Receivable balance of$425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 beforeadjustment. Blake estimates bad debt expense as 3/4 of 1% of net credit sales.
c)Hidgon Inc. has a balance of $812,000 in Accounts Receivable at December 31. An analysis of thosereceivables shows $24,000 will probably not be collected. Before adjusting entries are prepared, the Allowancefor Doubtful Accounts has a debit balance of $750.