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    Soal P 7.2, 7.3, 7.5

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    Halen Company's bad debt expense for 2019 is $37,100 (7% of $53,000 accounts receivable). Stuart Corp's cash realizable receivables at 12/31/19 is $105,000 ($180,000 - $1,750,000 allowance + $125,000 allowance per books). Shore Co's allowance for doubtful accounts balance at 12/31/19 is $60,000 ($1,500,000 receivables x 4% = $60,000). Darden Inc's accounts receivable before allowance at 12/31/19 is $974,000 ($950,000 net receivables + $24,000 write-

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    Soal P 7.2, 7.3, 7.5

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    boba milk
    260 views3 pages
    Halen Company's bad debt expense for 2019 is $37,100 (7% of $53,000 accounts receivable). Stuart Corp's cash realizable receivables at 12/31/19 is $105,000 ($180,000 - $1,750,000 allowance + $125,000 allowance per books). Shore Co's allowance for doubtful accounts balance at 12/31/19 is $60,000 ($1,500,000 receivables x 4% = $60,000). Darden Inc's accounts receivable before allowance at 12/31/19 is $974,000 ($950,000 net receivables + $24,000 write-

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    soal P 7.2, 7.3, 7.5

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    Halen Company's bad debt expense for 2019 is $37,100 (7% of $53,000 accounts receivable). Stuart Corp's cash realizable receivables at 12/31/19 is $105,000 ($180,000 - $1,750,000 allowance + $125,000 allowance per books). Shore Co's allowance for doubtful accounts balance at 12/31/19 is $60,000 ($1,500,000 receivables x 4% = $60,000). Darden Inc's accounts receivable before allowance at 12/31/19 is $974,000 ($950,000 net receivables + $24,000 write-

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    260 views3 pages

    Soal P 7.2, 7.3, 7.5

    Uploaded by

    boba milk
    Halen Company's bad debt expense for 2019 is $37,100 (7% of $53,000 accounts receivable). Stuart Corp's cash realizable receivables at 12/31/19 is $105,000 ($180,000 - $1,750,000 allowance + $125,000 allowance per books). Shore Co's allowance for doubtful accounts balance at 12/31/19 is $60,000 ($1,500,000 receivables x 4% = $60,000). Darden Inc's accounts receivable before allowance at 12/31/19 is $974,000 ($950,000 net receivables + $24,000 write-

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    © All Rights Reserved
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    of 3

    P7.2 (LO3) (Bad-Debt Reporting) The following are a series of unrelated situations.

    1. Halen Company's unadjusted trial balance at December 31, 2019, included


    the following accounts.
    Debit Credit
    $53,000
    4,000
    $1,200,000
    Accounts receivable
    Allowance for doubtful accounts
    Net sales
    Halen Company estimates its bad debt expense to be 7% of gross accounts
    receivable. Determine its bad debt expense for 2019.
    2. An analysis and aging of Stuart Corp. accounts receivable at December 31,
    2019, disclosed the following.
    $  180,000
    Amounts estimated to be uncollectible 1,750,000
    125,000
    Accounts receivable
    Allowance for doubtful accounts (per books)
    What is the cash realizable value of Stuart's receivables at December 31,
    2019?
    3. Shore Co. provides for doubtful accounts based on 4% of gross accounts
    receivable, which had a balance of $1,500,000 at year-end. The following
    data are available for 2019.
    $4,400,000
    17,000
    Credit sales during 2019
    8,000
    30,000
    Allowance for doubtful accounts 1/1/19
    Collection of accounts written off in prior years (customer credit
    was reestablished)
    Customer accounts written off as uncollectible during 2019
    What is the balance in Allowance for Doubtful Accounts at December 31,
    2019?
    4. At the end of its first year of operations, December 31, 2019, Darden Inc.
    reported the following information.
    $950,000
    Accounts receivable, net of allowance for doubtful accounts 24,000
    84,000
    Customer accounts written off as uncollectible during 2019
    Bad debt expense for 2019
    What should be the balance in accounts receivable at December 31, 2019,
    before subtracting the allowance for doubtful accounts?
    5. The following accounts were taken from Bullock Inc.'s trial balance at
    December 31, 2019.
    Debit Credit
    $750,000
    $ 14,000
    310,000
    Net credit sales
    Allowance for doubtful accounts
    Accounts receivable

    If doubtful accounts are 3% of accounts receivable, determine the bad debt


    expense to be reported for 2019.
    Instructions
    Answer the questions relating to each of the five independent situations as
    requested.

    .
    P7.3 (LO3) (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 was $555,000 and Allowance for
    Doubtful Accounts had a credit balance of $40,000. The year-end balance
    reported in the statement of financial position for Allowance for Doubtful
    Accounts will be based on the aging schedule shown below.
    Amount Probability of Collection
    $300,000 .98
    100,000 .90
    Days Account Outstanding 80,000 .85
    40,000 .80
    20,000 .55
    15,000 .00
    Less than 16 days
    16–30 days
    31–45 days
    46–60 days
    61–75 days
    Over 75 days
    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 statement of
    financial position.
    c. What is the dollar effect of the year-end bad debt adjustment on the beforetax income?

    P7.5 (LO3) (Bad-Debt Reporting) The following is information related to the


    Accounts Receivable accounts of Gulistan AG during the current year 2019.
    Instructions
    Assuming that the books have not been closed for 2019, make the necessary correcting entries.

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