Appropriate balance for the allowance for doubtful accounts

Assignment Help Financial Accounting

Reference no: EM13170375

Chatter Corporation operates in an industry that has a high rate of bad debts. Before any year-end adjustments, the balance in Chatter's Accounts Receivable account was $389,000 and the Allowance for Doubtful Accounts had a debit balance of $5,000. The year-end balance reported in the balance sheet for the Allowance for Doubtful Accounts will be based on the aging schedule shown below:

Days Account Outstanding	Amount	Probability of Collection
Less than 16 days	$293,000	.97
Between 16 and 30 days	$102,000	.89
Between 31 and 45 days	$ 70,000	.83
Between 46 and 60 days	$ 55,000	.76
Between 61 and 75 days	$ 28,000	.60
Over 75 days	$ 8,000	.30

What is the appropriate balance for the Allowance for Doubtful Accounts at year-end?
Show how accounts receivable would be presented on the balance sheet.
What is the dollar effect of the year-end bad debt adjustment on the before-tax income?

Reference no: EM13170375

Questions Cloud

Compute the amount of heat necessary to raise : Calculate the amount of heat necessary to raise the temperature of 12.0g of water from 15.4 degrees celsius to 93.0 degrees celsius

State waals equation of state to calculate the pressure : Use the van der Waals equation of state to calculate the pressure of 3.20 mol of Xe at 481 K in a 5.80-L vessel.

Explain equation to calculate the ph after the addition : Use the Henderson Hasselbalch Equation to calculate the pH after the addition of 0.10 M NaOH to this solution, assuming no change in volume?

Prepare an unadjusted trial balance : Prepare an unadjusted trial balance and record depreciation using a 5-year life on the office equipment, the straight-line method, and no salvage value. Round to whole numbers. Also, record an adjustment for office supplies used in the amount of $510..

Appropriate balance for the allowance for doubtful accounts : What is the appropriate balance for the Allowance for Doubtful Accounts at year-end and show how accounts receivable would be presented on the balance sheet.

Explain what functional group is present in glucose : What functional group is present in glucose? Is glucose a reducing or nonreducing carbohydrate?

State the chloride was treated with silver nitrate : A metal, M, was converted to the chloride, MCl2. Then a solution of the chloride was treated with silver nitrate to give silver chloride crystals

Explain a disproportionation reaction is a type of oxidation : A disproportionation reaction is a type of oxidation-reduction reaction. which species is oxidized and which is reduced? B.) If 1.0 mL of 55% HSO3^- by mass is obtained in the reaction, what mass of S2O3^2- was present initially

Context of accounting for overseas operations : Describe the concepts of functional and presentational currencies in the context of accounting for overseas operations.

User Account

All Pages