Reference no: EM132833341
Questions -
Q1. On December 31, 2019, Cha Corporation had accounts receivable of $6,000,000, net of the related allowance for doubtful accounts. During 2019, Cha Corporation recorded charges to bad debt expense of $900,000 and wrote off $200,000 of uncollectible accounts receivable. On December 31, 2019, how much should be reported as accounts receivable before the allowance for doubtful accounts?
Q2. On Dec. 31, 2018, Heart Inc. has allowance for doubtful accounts of $4,000. Each month, Heart Inc. makes interim provision for bad debts equal to 1% of credit sales. During 2019, total credit sales are $1,000,000 and $16,000 of accounts receivable is written off. Aging of accounts receivable at December 31, 2019 indicates that an allowance of $20,000 should be provided for doubtful accounts as of that date. How much is the total amount of debit or total amount of credit in the adjusting entry (if there is any) to be made on Dec. 31, 2019?
Q3. In preparing the aging of accounts receivable of Liza Inc., the accountant determined that the net realizable value of receivables is 4,000,000 on December 31, 2021. Additional data are as follows:
Accounts Receivable (December 31, 2021) - 4,500,000
Accounts Receivable - Net (December 31, 2020) - 2,000,000
Accounts Receivable (January 1, 2021) - 2,350,000
Accounts written off during 2020 - 100,000
How much is the doubtful accounts expense for 2021?
Q4. On January 1, 2019, Love Co. sold merchandise to Kit Store in exchange for a non-interest bearing note requiring 10 annual payments of 100,000. Kit Store made the first payment on December 31, 2019. The prevailing market interest rate for similar notes is 8%.
a. How much is the value of notes receivable as of December 31, 2020?
b. How much is the Interest income recognized during 2020?
Q5. On Dec. 31, 2021, Boss Company had a credit balance of $50,000 in its records pertaining to allowance for uncollectible accounts. Analysis of its accounts receivable on the same date revealed the following:
|
Age
|
Amount
|
% collectible
|
|
0-30 days
|
$5,000,000
|
95
|
|
31-60 days
|
600,000
|
85
|
|
61-90 days
|
450,000
|
70
|
|
Over 90 days
|
100,000
|
50
|
|
Total
|
$6,150,000
|
|
The company has written off $20, 000 of accounts receivable during 2021. How much is the allowance for uncollectible accounts to be reported on Dec. 31, 2021?