Financial Accounting: An Integrated Statements Approach, 2nd Edition

Using data in Exercise 8-4, assume that the allowance for doubtful accounts for Vandalay

Industries has a credit balance of $8,195 before adjustment on November 30. Journalize the ad-

justing entry for uncollectible accounts as of November 30.

Phoenician Co. is a wholesaler of office supplies. An aging of the company’s accounts receivable

on December 31, 2007, and a historical analysis of the percentage of uncollectible accounts in

each age category are as follows:

Percent

Age Interval Balance Uncollectible

Not past due $350,000 1%

1–30 days past due 90,000 2

31–60 days past due 17,000 5

61–90 days past due 13,000 10

91–180 days past due 9,400 70

Over 180 days past due 3,600 90

$483,000

Estimate what the proper balance of the allowance for doubtful accounts should be as of

December 31, 2007.

Using the data in Exercise 8-7, assume that the allowance for doubtful accounts for Phoenician

Co. had a debit balance of $2,760 as of December 31, 2007.

Journalize the adjusting entry for uncollectible accounts as of December 31, 2007.

At the end of the current year, the accounts receivable account has a debit balance of $775,000,

and net sales for the year total $6,000,000. Determine the amount of the adjusting entry to pro-

vide for doubtful accounts under each of the following assumptions:

a. The allowance account before adjustment has a credit balance of $4,750. Bad debt expense

is estimated at^1 – 4 of 1% of net sales.

b. The allowance account before adjustment has a credit balance of $3,750. An aging of the

accounts in the customer ledger indicates estimated doubtful accounts of $18,350.

c. The allowance account before adjustment has a debit balance of $5,050. Bad debt expense

is estimated at^1 – 2 of 1% of net sales.

d. The allowance account before adjustment has a debit balance of $5,050. An aging of

the accounts in the customer ledger indicates estimated doubtful accounts of

$31,400.

Jadelis Resources, a computer consulting firm, has decided to write off the $12,500 balance of an

account owed by a customer. Journalize the entry to record the write-off, assuming that (a) the

direct write-off method is used, and (b) the allowance method is used.

378 Chapter 8 Receivables

Exercise 8-6

Adjustment for uncollectible

accounts

Goal 4

Exercise 8-7

Estimating doubtful accounts

Goal 4

Exercise 8-8

Entry for uncollectible

accounts

Goal 4

Exercise 8-9

Providing for doubtful

accounts

Goal 4

a. $15,000

b. $14,600

Exercise 8-10

Entries to write off accounts

receivable

Goals3, 4