Complete the acounting for the following Journal Entries: #2: Bigger corp has nurnerous clients they sell to on account. At 12/31/18, Bigger’s accounts receivable balance is $500,000 and their balance in their Allowance for Bad Debt account is a credit balance of $15,000 Based on past experience and other factors, the corp estimates that 8% of its account receivable is uncollectable after preparing an Aging of their A/Rec They determine this to be a material amount and therefore use the Allowance Method a) prepare the accounting for estimating Bad Debt Exp under the Allowance Method b) show the Corp’s Net Realizable Value after (a) above c) After accounting for their Allowance, on 7/1/1~ Bigger identifies Customer F to be written off. F owes then, $20,000 show the accounting for Cust F’s write-off under the Allowance Method d) show the Corp’s Net Realizable Value after writing off Customer F
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Complete the acounting for the following
#2:
Bigger corp has nurnerous clients they sell to on account. At 12/31/18, Bigger’s accounts receivable balance is $500,000
and their balance in their Allowance for
Based on past experience and other factors, the corp estimates that 8% of its account receivable is uncollectable after preparing an Aging of their A/Rec They determine this to be a material amount and therefore use the Allowance Method
a) prepare the accounting for estimating Bad Debt Exp under the Allowance Method b) show the Corp’s Net Realizable Value after (a) above
c) After accounting for their Allowance, on 7/1/1~ Bigger identifies Customer F to be written off. F owes then, $20,000 show the accounting for Cust F’s write-off under the Allowance Method
d) show the Corp’s Net Realizable Value after writing off Customer F
Step by step
Solved in 3 steps with 2 images
