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Naily [24]
3 years ago
15

Compute the uncollectible account expense, and make the appropriate journal entry, for the current year assuming the uncollectib

le account expense is determined as follows:
a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sales.
b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales.
c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach.
The estimate based on an aging of accounts receivable is that an allowance of $12,000 would be appropriate.
Business
1 answer:
Gnoma [55]3 years ago
4 0

Question Completion:

Johnson Corporation’s Unadjusted Trial Balance at year-end included the following accounts:

Debit Credit

Sales (75% represent credit sales) (credit) $1,152.000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

Answer:

<h2>Johnson Corporation</h2>

a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sale:

Journal Entry:

Debit Uncollectible Accounts Expense $11,520

Credit Allowance for Doubtful Accounts $11,520

To record the uncollectible accounts expense for the year.

b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales:

Journal Entry:

Debit Uncollectible Accounts Expense $12,960

Credit Allowance for Doubtful Accounts $12,960

To record the uncollectible accounts expense for the year.

c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach

Journal Entry:

Debit Uncollectible Accounts Expense $9,816

Credit Allowance for Doubtful Accounts $9,816

To record the uncollectible accounts expense for the year.

Explanation:

a) Data and Determination of Uncollectible Expenses and Allowances:

Sales (75% represent credit sales) (credit) $1,152,000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

1. Uncollectible Accounts Expense = 1% of Sales:

= 1% of $1,152,000

= $11,520

2. Uncollectible Accounts Expense = 1.5% of Credit Sales:

= 1.5% of $864,000 (75% of $1,152.000 )

= $12,960

3. Allowance for Doubtful Accounts based on an aging of accounts receivable of $12,000:

Adjustment required to bring the Allowance for Doubtful Accounts to $12,000 is $9,816 ($12,000 - 2,184).

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Answer:

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A

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Why does actual group productivity never equal potential productivity?
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Answer:

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solution

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