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deff fn [24]
3 years ago
11

Estimating Uncollectible Accounts and Reporting Accounts Receivable LaFond Company analyzes its accounts receivable at December

31, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
Age Group Accounts Receivable Estimated Loss %

0-30 days past due $ 180,000 1%

31-60 days past due 40,000 2

61-120 days past due 22,000 5

121-180 12,000 10

Over 180 days past due 8,000 25

Total accounts receivable $ 262,000


The unused balance of the allowance for uncollectible accounts on December 31, before any adjustments, is $1,040.

(a) What amount of bad debts expense will LaFond report in its income statement for the year?
Business
1 answer:
Neko [114]3 years ago
3 0

Answer:

$5,860

Explanation:

Age group                         Accounts          Estimated      Loss

                                           receivable           Loss

0-30 days past due           $180,000             1%             $1,800

31-60 days past due          $40,000              2%             $800

61-120 days past due         $22,000              5%             $1,100

121-180 days past due        $12,000               10%            $1,200

Over 180 days past due     $8,000               25%            $2,000

Total accounts receivable  $262,000                              $6,900

Bad debt expense = Total bad debts - Allowance

= $6,900 - $1,040

= $5,860

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Read 2 more answers
If aggregate expenditure in an economy equals 1,000 0. 9y and full employment real gdp equals 9,000, then this economy has:_____
LenKa [72]

The economy would be in equilibrium as  AE = 1000 + 0.9Y

Y = 1000 + 0.9Y

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<h3>What does total spending actually mean?</h3>

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An auditor should perform alternative procedures to substantiate the existence of accounts receivable when:
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3 years ago
A seller uses a perpetual inventory system, and on April 4, it sells $5,000 in merchandise (its cost is $2,400) to a customer on
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Answer:

1. Dr Accounts Receivable $5,000

Cr Sales for $5,000

2. Dr Cost of Goods Sold for $2,400

Cr Merchandise Inventory for $2,400

Explanation:

1.,Preparation of the journal entry to record the revenue part of the transaction

Based on the information given we were told that on April they sells the amount of $5,000 in merchandise which means that the Journal entry will be :

Dr Accounts Receivable for $5,000

Cr Sales for $5,000

2. Preparation of Journal entry to record the cost part

Based on the information given we were told that the its cost the amount of $2,400 which means that the Journal entry will be :

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6 0
3 years ago
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