The following transactions took place during 2020 for Webb Industries.
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Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The following transactions took place during 2020 for Webb Industries.
1-1-2020 – established that $85,000 will be deemed to be uncollectable during 2020.
12-31-2020 – it was determined that $30,000 were actually to be written off as uncollectable accounts during 2020.
Please prepare both
Step by step
Solved in 2 steps
- Analyzing Accounts Receivable Upham Companys June 30, 2019, balance sheet included the following information: Required: 1. Prepare the journal entries necessary for Upham to record the preceding transactions. 2. Prepare an analysis and schedule that shows the amounts of the accounts receivable, allowance for doubtful accounts, notes receivable, and notes receivable dishonored accounts that will be disclosed on Uphams June 30, 2020, balance sheet.Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019. Part A Accounts receivable.. .$2,800,000 Allowance for uncollectible accounts... . .$88,800 (credit) The company completed the following transactions during 2019. • April 20- Wrote off the balance of $1,000 from Shari Wickham's account as uncollectible. • November 27 Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier. • December 31st- i. Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible. ii. Made the closing entry for the uncollectible expense account. Requirements: 1. Prepare journal entries for each transaction (No narrations required) 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the…
- On December 31, 2020, Extreme Fitness has adjusted balances of $960,000 in Accounts Receivable and $87,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $26,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020?The December 31, 2021, ledger of accounts receivable has a balance of 24,000,000. On this date, the company estimates 1,200,000 to be uncollectible , whereas 2,000,000 have to be written off.Required:1. Carry out any necessary journal entries.2. Present the accounts receivable extract as it has to appear in the statement of financial position of December 31,2021.Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019. Accounts receivable $2,800,000 Allowance for uncollectible accounts $88,800 (credit) The company completed the following transactions during 2019. Wrote off the balance of $1,000 from Shari Wickham’s account as uncollectible on April 20 Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier on November 27 On December 31st, Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible and made the closing entry for the uncollectible expense account. Requirements: 1. Prepare journal entries for each transaction (No narrations required) 2. Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information…
- From the following particulars of Al Zahra LLC for the year 2019, a. Accounts receivable on 1st Jan 2019 RO 20000. b. During the year RO 18000 was collected from the Opening Accounts receivables and the remaining was treated as uncollectable. c. Sales during the year was RO 175000 d. Amount collected from current years sales was RO 150000 e. From the year 2019 Al Zahra LLC started to use Allowance Method for writing off the un collectables. f. Allowance to be created @ 10% on closing receivables Prepare a) Account of receivables andFrom the following particulars of Al Zahra LLC for the year 2019, a. Accounts receivable on 1st Jan 2019 RO 20000. b. During the year RO 18000 was collected from the Opening Accounts receivables and the remaining was treated as uncollectable. c. Sales during the year was RO 175000 d. Amount collected from current years sales was RO 150000 e. From the year 2019 Al Zahra LLC started to use Allowance Method for writing off the un collectables. f. Allowance to be created @ 10% on closing receivablesFrom the following particulars of Al Zahra LLC for the year 2019, a. Accounts receivable on 1st Jan 2019 RO 20000. b. During the year RO 18000 was collected from the Opening Accounts receivables and the remaining was treated as uncollectable. c. Sales during the year was RO 175000 d. Amount collected from current years sales was RO 150000 e. From the year 2019 Al Zahra LLC started to use Allowance Method for writing off the un collectables. f. Allowance to be created @ 10% on closing receivables Prepare a) Account of receivables and b) Allowance for Doubtful debts from the above information
- On December 31, 2020, Extreme Fitness has adjusted balances of $1,000,000 in Accounts Receivable and $95,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $30,000. Required: a. What amount would the company report as its net accounts receivable on December 31, 2020? b.Prepare the journal entry to write off the accounts on January 2, 2021. c-1. Assuming no other transactions occurred between December 31, 2020, and January 3, 2021, what amount would the company report as its net accounts receivable on January 3, 2021? c-2. Has net accounts receivable changed from December 31, 2020? Complete this question by entering your answers in the tabs below. Req A Req B Req C1 Check my work Req C2 What amount would the company report as its net accounts receivable on December 31, 2020? Net Accounts ReceivableAssume that the accountant of Diamond Furniture on March 1, 2018, authorizes a write off of the RO 1000 balance owed by Mr Abdul Salam. But on July 1, Mr Abdul Salam pays the RO 1000 amount that Diamond Furniture had written off on March 1. From the following given options, identify which of the following two journal entries can be pass in the books of Diamond Furniture for the recovery of uncollectable accounts receivables under allowance method ? Dr. Accounts receivables A/C OMR 1000 and Cr Allowance for bad debt A/C OMR1000 i) Dr Allowance for bad debt A/C OMR1000 and Cr Accounts receivables A/C OMR1000 i) Dr Cash A/C OMR 1000 and Cr Accounts Receivables A/C OMR 1000 iv) Dr Accounts receivables A/C OMR 1000 and Cr Cash A/C OMR 1000Sadaf Oman Company's ledger showed an ending accounts receivable balance of RO 25,000 on April 30, 2020. During the next month, May, the company provided services for RO 24,000 in total. Customers made down payment of RO 3,000; and the remaining balance was on account. The Company received payments on this account of RO 15.000. The balance in the T-account for the accounts receivable at the end of May, 2020 is: O a. RO 31,000 debit. O b. RO 19,000 debit. O. RO 26,000 debit. O d. RO 28,000 debit. O e. None of the options are correct