Johnson Company uses the allowance method to account foruncollectible accounts receivable. Bad debt expense is establishedas a percentage of credit sales. For 2013, net credit sales totaled$6,000,000, and the estimated bad debt percentage is 1.50%. Theallowance for uncollectible accounts had a credit balance of$57,000 at the beginning of 2013 and $47,500, after adjustingentries, at the end of 2013.
Required
What is bad debt expense for 2013?
. Determine the amount of accounts receivable written off during2013
If the companyuses the direct write-off method, what would bad debt expense befor 2013?
Johnson Company uses the allowance method to account foruncollectible accounts receivable. Bad debt expense is establishedas a percentage of credit sales. For 2013, net credit sales totaled$6,000,000, and the estimated bad debt percentage is 1.50%. Theallowance for uncollectible accounts had a credit balance of$57,000 at the beginning of 2013 and $47,500, after adjustingentries, at the end of 2013.
| Required |
| What is bad debt expense for 2013?
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Related questions
Platinum Pools Company has the following information on its 2013comparative Balance Sheet:
2013 | 2012 | |
Accounts Receivable (less allowances for doubtful accounts of$14,000 in 2013 and $17,500 in 2012) | $958,000 | $1,027,000 |
Additional information: During 2013, Platinum wrote-off $20,000of accounts that had been identified as uncollectible. All Platinumsales were credit sales in 2013. Platinum collected $2,500,000 fromcustomers in 2013.
a. Provide the journal entry that Platinum made during 2013 torecord the write-off.
Account name | Debit | Credit |
b. What is the amount of Platinumâs 2013 credit sales?
2013 Credit Sales |
c. What is the amount that Platinum recorded as bad debt expenseon its 2013 income statement?
2013 Bad debt expense |
d. Assuming Platinum used a balance sheet approach with a singlebad debt rate (rather than multiple rates from aging specificreceivables) in estimating bad debt expense, what is the bad debtrate applied in 2013?
2013 debt rate |
6. The bad-debt method that uses the accounts receivable agingreport is _______________.
the bad-debt expense method | |
the percentage-of-sales method | |
the direct write-off method | |
the percentage-of-receivables method |
7. When it is determined that too much money has been set asidefor uncollectible accounts, we will _______________.
credit reserve for uncollectible accounts | |
debit accounts receivable | |
credit cash | |
debit reserve for uncollectible accounts |
8. A customer whose account was previously written offunexpectedly pays us. If we are using the allowance method we would_______________.
debit accounts receivable and credit allowance for uncollectibleaccounts AND debit cash and credit accounts receivable | |
debit cash and credit bad-debt expense | |
debit reserve for uncollectible accounts and credit cash | |
debit bad-debt expense and credit cash |
9. When a retailer accepts a bank card (VISA or MasterCard),they will make what entry for the dayâs receipts?
debit cash and debit âcredit card expenseâ; credit sales | |
debit accounts receivable and credit sales | |
debit cash and credit sales | |
debit accounts receivable; credit sales, and credit âcredit cardexpenseâ |
