Copy Of Allowance Method Homework Solution

Date 01/20/B

01/20/B

01/29/B

05/10/B

09/24/B

09/24/B

12/30/B

12/31/B

Accounts & Explanation A/R - ELLIS ALLOWANCE FOR DOUBTFUL ACCOUNTS

2,000

ALLOWANCE FOR DOUBTFUL ACCOUNTS A/R - SMITH

4,000

CASH ALLOWANCE FOR DOUBTFUL ACCOUNTS A/R - LAWLOR

2,700 6,300

2,000

4,000

9,000

A/R - BROWN ALLOWANCE FOR DOUBTFUL ACCOUNTS

700

CASH A/R - BROWN

700

700

700

ALLOWANCE FOR DOUBTFUL ACCOUNTS A/R - AMES A/R - BOSCO A/R -EVANS A/R -GEORGE

2,900

BAD DEBTS EXPENSE ALLOWANCE FOR DOUBTFUL ACCOUNTS (ADJUSTING ENTRY - SEE "T" ACCOUNT BELOW)

9,500

Total A/R - Allowance for D/A Net A/R

Credit 2,000

CASH A/R - ELLIS

ALLOWANCE FOR DOUBTFUL ACCOUNTS 01/01/B 01/20/B 01/29/B 4,000 05/10/B 6,300 09/24/B 12/30/B 2,900 12/31/B adj. 12/31/B

Date 12/31/B

Debit 2,000

$250,000.00 10,000 $240,000.00

600 1,000 900 400

9,500

11,000 2,000

700 500 BEFORE ADJUSTMENT 9,500 10,000 AFTER ADJUSTMENT

(see Dec. 31. Entry information)

Accounts & Explanation BAD DEBTS EXPENSE ALLOWANCE FOR DOUBTFUL ACCOUNTS

Debit 10,000

Credit 10,000

(ADJUSTING ENTRY - SEE "T" ACCOUNT BELOW) 1% of $1,000,000 of sales = $10,000 (just do math and use answer in standard adjusting entry when this method of estimating bad debts is used). ALLOWANCE FOR DOUBTFUL ACCOUNTS 01/01/B 01/20/B 01/29/B 4,000 05/10/B 6,300 09/24/B 12/30/B 2,900 12/31/B adj. 12/31/B

Total A/R - Allowance for D/A Net A/R

$250,000.00 10,500 $239,500.00

11,000 2,000

700 500 BEFORE ADJUSTMENT 10,000 10,500 AFTER ADJUSTMENT

(see Dec. 31. Entry information)