Chapter 9 Problems
(Four problems, 20 points total, 5 points each)
1.
Dexter Company uses the direct write-off method. Prepare journal
entries to record the 2 transactions below.
March 11 Dexter determines that it cannot collect $9,300 of its accounts
receivable from Leer Company.
March 29 Leer Company unexpectedly pays its account in full to Dexter
Company. Dexter records its recovery of this bad debt.
2.
At year-end December 31, Chan Company estimates its bad debts as
1.00% of its annual credit sales of $962,000. Chan records its bad
debts expense for that estimate. On the following February 1, Chan
decides that the $481 account of P. Park is uncollectible and writes it
off as a bad debt. On June 5, Park unexpectedly pays the amount
previously written off. Prepare Chan's journal entries to record the
transactions of December 31, February 1, and June 5.
3.
Prepare the adjusting entry to record bad debts under each separate
assumption.
a) Bad debts are estimated to be 3% of credit sales.
b) Bad debts are estimated to be 2% of total sales.
c) An aging analysis estimates that 5% of year-end accounts
receivable are uncollectible.
Adjusting entries (all dated December 31).
4.
On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an
unadjusted credit balance of $16,000. Jarden prepares a schedule of its
December 31 accounts receivable by age.
Required:
A. Compute the required balance of the Allowance for Doubtful Accounts
at December 31.
Percent
Accounts Estimated
Uncollectible
Receivable Uncollectible
(#.##%)
Not due: x =
1 to 30: x =
31 to 60: x =
61 to 90: x =
Over 90: x =
Estimated balance of allowance for uncollectibles credit
B. Prepare the adjusting entry to record bad debts expense at December 31.