Chapter 7: Q10DQ (page 342)
Refer to the December 31, 2015, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable, titled as “Trade Receivables,” as a current or noncurrent asset?
Answer
Trade receivables of the company are classified and reported as current assets on the balance sheet.
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Jarden Company has credit sales of \(3,600,000 for year 2017. On December 31, 2017, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of \)14,500. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
Required:
Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Refer to the information in Exercise 7-7 to complete the following requirements.
At December 31, Folgeys Coffee Company reports the following results for its calendar year.
Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(900,000
Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000
Its year-end unadjusted trial balance includes the following items.
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . \)125,000 debit
Allowance for doubtful accounts . . . . . . . . . . . . . . . . 5,000 debit
b. Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be 1% of total sales.
Solstice Company determines on October 1 that it cannot collect $50,000 of its accounts receivable from its customer P. Moore. It uses the direct write-off method to record this loss as of October 1. On October 30, P. Moore unexpectedly paid his account in full to Solstice Company. Record Solstice’s entry(ies) to reflect recovery of this bad debt.
Dexter Company applies the direct write-off method in accounting for uncollectible accounts. Prepare journal entries to record the following selected transactions of Dexter.
Mar. 11 Dexter determines that it cannot collect $45,000 of its accounts receivable from its customer Leer Company.
29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt.
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