Accounting Study Notes

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BUS 5502
Ch. 8, 10, 11, 12, 13, 14, 15, 18

Receivables:

1. The Allowance for uncollectible accounts currently has a credit balance of $900. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $15,000. What will be the amount of uncollectible accounts expense reported on the income statement? 1/11/2011| Accounts Receivable| a| $ 900.00 | | | Sales revenue| a| | $ 900.00 |

| Uncollectable-Account expense| b| $ 15,000.00 | | | Allowance for uncollectible accounts| b| | $ 15,000.00| | | | | |
| Balance Sheet:| | | |
| Accounts Receivable| | $ 900.00 | |
| Less Allowance for uncollectible accounts| $ 14, 100.00| | | | | $ 15, 000| |

2. The Allowance for uncollectible accounts currently has a credit balance of $200. The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of uncollectible-account expense reported on the income statement? Date| Account| Post. Ref| Debit | Credit |

1/11/2011| Accounts Receivable| a| $ 200.00 | | | Sales revenue| a| | $ 200.00 |
| Bad Debt Expense (115000 X 2.5%)| b| $ 2,875.00 | | | Allowance for uncollectible accounts| b| | $ 2,875.00 | | | | | |
| Balance Sheet:| | | |
| Accounts Receivable| | $ 3075.00 | |
| Less Allowance for uncollectible accounts| $ 15,000.00 | | | | | $ 17,875.00 | |

3. The allowance for uncollectible accounts currently has a credit balance of $900. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $15,000. What will be the amount of allowance for uncollectible accounts reported on the balance sheet? 1/11/2011| Accounts Receivable| a| $ 900.00 | | | Sales revenue| a| | $ 900.00 |

| Uncollectable-Account expense| b| $ 15,000.00 | | | Allowance for uncollectible accounts| b| | $ 15,000.00| | | | | |
| Balance Sheet:| | | |
| Accounts Receivable| | $ 900.00 | |
| Less Allowance for uncollectible accounts| $ 14, 100.00| | | | | $ 15,000.00| |

4. The following information is from the 2010 records of Armadillo Camera Shop:

Accounts receivable, December 31, 2010| $20,000 (debit)| Allowance for uncollectible accounts, December 31, 2010 prior to adjustment| 600 (debit)| Net credit sales for 2010| 95,000|

Accounts written off as uncollectible during 2010| 7,000| Cash sales during 2010| 27,000|

Uncollectible accounts expense is estimated by the percent-of-sales method. Management estimates that 3% of net credit sales will be uncollectible. Which of the following will be the amount of Uncollectible accounts expense? $2850.00

5. The following information is from the 2010 records of Armadillo Camera Shop:

Accounts receivable, December 31, 2010| $20,000 (debit)| Allowance for uncollectible accounts, December 31, 2010 prior to adjustment| 600 (debit)| Net credit sales for 2010| 95,000|

Accounts written off as uncollectible during 2010| 7,000| Cash sales during 2010| 27,000|

Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method. Management estimates that $2,850 of accounts receivable will be uncollectible. Which of the following will be the amount of Uncollectible accounts expense? 2850 – 600 = $2250

The allowance for uncollectible accounts currently has a credit balance of $200. The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are...
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