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katen-ka-za [31]
3 years ago
8

Johnson Company calculates its allowance for uncollectible accounts as 10% of its ending balance in gross accounts receivable. T

he allowance for uncollectible accounts had a credit balance of $28,000 at the beginning of 2021. No previously written-off accounts receivable were reinstated during 2021. At 12/31/2021, gross accounts receivable totaled $466,700, and prior to recording the adjusting entry to recognize bad debts expense for 2021, the allowance for uncollectible accounts had a debit balance of 51,300. Required: 1. What was the balance in gross accounts receivable as of 12/31/2020? 2. What journal entry should Johnson record to recognize bad debt expense for 2021? 3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021. 4. If Johnson instead used the direct write-off method, what wou
Business
1 answer:
Tju [1.3M]3 years ago
6 0

Answer:

1. What was the balance in gross accounts receivable as of 12/31/2020?

= allowance for doubtful accounts 2020 / 10% = $28,000 / 10% = $280,000

2. What journal entry should Johnson record to recognize bad debt expense for 2021?

Dr Bad debt expense (= 46,670 + 51,300) 97,970

    Cr Allowance for doubtful accounts 97,970

3. Assume Johnson made no other adjustment of the allowance for uncollectible accounts during 2021. Determine the amount of accounts receivable written off during 2021.

= credit balance allowance for doubtful accounts January 1 + debit balance allowance for doubtful accounts December 31 = $28,000 + $51,300 = $79,300

4. If Johnson instead used the direct write-off method, what would the bad debt expense be

The bad debt expense would equal $79,300. The allowance for doubtful accounts is used as an estimate of future bad debt expense, while the direct write off method directly writes off bad debt as they occur.

Explanation:

beginning balance of allowance for doubtful accounts $28,000

gross accounts receivable $466,700 x 10% = $46,670 bad debt

before adjustments, the allowance for doubtful accounts had a debit balance of $51,300

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Answer:

Please find the detailed answer as follows:

Explanation:

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Related concepts to understand the problem.

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Natasha_Volkova [10]

Answer:

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The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.  

The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.

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Hence, the net cash outflows from investing activities (in $'million)

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Weyerhaeuser Incorporated has a balance sheet that lists $108 million in assets, $62 million in liabilities, and $46 million in
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Answer:

$46/ share

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The book value per share is calculated by dividing the common shareholders equity by the number of outstanding shares. In the given case Weyerhaeuser Incorporated has 1 million shares outstanding and the common shareholders equity worth's $46 million. The book value per share is

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A boat, costing $108,000 and uninsured, was wrecked the very first day it was used. It can either be disposed of for $11,000 cas
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Answer:

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So, cost advantage = Cost of new boat - Rebuilt of boat

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