Below are two independent problems related to bad debt estimates. 1. An unadjusted trial...
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Accounting
Below are two independent problems related to bad debt estimates.
An unadjusted trial balance for Highperformance Co shows the following balances at December :
Accounts Receivable
Allowance for Doubtful Accounts
Instruction: For each of the cases below, calculate: a the amount of "bad debt expense", b the ending balance for the "Allowance for Doubtful Accounts", and c the ending net realizable value for the "Accounts receivable".
Case : Assume that the company estimates its bad debts based on percentage of accounts receivable method. Company experience indicates that of receivable will be uncollectible.
Answer: a:
b :
c :
Case : Assume that the allowance for bad debts has a debit balance of $ instead. Other things being equal.
Answer: a:
mathrmb:
mathrmc:
An aging schedule is developed as follows.
Days Account outstanding
Less than days
days
days
days
Assume that the allowance for bad debts had a credit balance of $ before adjustment. Calculate: a the ending "allowance for bad debts" balance; and b the "bad debt expense".
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