Ghosh company has credit sales of 28 million for year 2009

Reference no: EM13598784

Ghosh Company has credit sales of $2.8 million for year 2009. On December 31, 2009, the company's allowance for Doubtful Accounts has an unadjusted credit balance of $22,800. Ghosh prepares a schedule of its December 31, 2009, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each category that will become uncollectible. This information is summarized here.

December 31, 2009
Accounts Receivable Age ofAccounts Receivable Expected Percent Uncollectible
$784,000 Not yet due 1.25%
380,200 1 to 30 days past due 2.00
81,800 31 to 60 days past due 6.50
52,000 61 to 90 days past due 32.75
13,000 Over 90 days past due 68.00

Required
1. Estimate the required balance of the allowance for Doubtful Accounts at December 31, 2009, using the aging of accounts receivable method.
2. Prepare the adjusting entry to record bad debts expense at December 31, 2009. Analysis Component
3. On June 30, 2010, Ghosh Company concludes that a customer's $4,750 receivable is uncollectible and that the account should be written off. What effect will this action have on Ghosh's 2010 net income? Explain.

Reference no: EM13598784

Questions Cloud

A firm reported sales of 300000 during the year and has a : a firm reported sales of 300000 during the year and has a balance of 20000 in its accounts receivable account at

Global world inc a u s corporation has interest expense for : global world inc. a u. s. corporation has interest expense for the tax year of 200000 no portion of which is directly

Transaction analysis-various accounts enter the following : transaction analysis-various accounts enter the following column headings across the top of a sheet of

Budgeted sales are january 433000 units february 420000 the : budgeted sales are january 433000 units february 420000. the company requires maintaining units on hand at the end of

Ghosh company has credit sales of 28 million for year 2009 : ghosh company has credit sales of 2.8 million for year 2009. on december 31 2009 the companys allowance for doubtful

Merchandise with a selling price of 21000 remained : castlevania company lost most of its inventory in a fire in december just before the year-end physical inventory was

Beaverhead creek inc bottles and distributes springwater on : beaverhead creek inc. bottles and distributes springwater. on march 4 of the current year beaverhead creek reaquired

Hampton textile co manufactures a variety of fabrics all : hampton textile co. manufactures a variety of fabrics. all materials are introduced at the beginning of production

What salary would seiko need to receive from her current : seikos currently has salary of 130000 and she fancies european sports cars. she purchases a new auto each year. seiko

User Account

All Pages