Problem 4

doubtful accounts expense

allowance for doubtful accts

150,000.00
150,000.00

aging
addt'l journal entry
doubtful accounts expense

200,000.00
50,000.00

allowance for doubtful accouts

vs
ADA by adjustments
beg
write off
expense (1)

200,000.00

300,000.00
(187,500.00)

ar
ADA end (5)
vs
ADA by adj
DA expense (4)
credit sales method
exp (4)
beg bal, ADA
wo
ADA end (CSM) (5)
Problem 5
Classification by Month of Sale
Nov. Dec. 2012
July October
January to June
Prior to January 2012

(112,500.00) allowance
87,500.00
a/r
ADA
187,500.00

wo

beg bal
wo
provision (recorded)
end bal, ADA (2)
vs. Should be
ADA (3)

Journal entry made

300,000.00
(187,500.00)
150,000.00
262,500.00
200,000.00
62,500.00 ADA
DA exp
2,375,000.00
2,375,000.00
5%
8%
118,750.00
190,000.00
112,500.00
6,250.00

112,500.00
77,500.00

300,000.00
87,500.00
200,000.00

62,500.00

(7)

(6)

150,000.00
300,000.00
(187,500.00)
262,500.00

Balance
per Estimated
Classification
Collectible
1,140,000
98.50%
600,000
92%
400,000
65%
130,000
30%
2,270,000

adjustment
160,000.00
(60,000.00)

ADA
90,000.00

wo

130,000.00
15,000.00
55,000.00
201,500.00
256,500.00

Problem 1
Categories
Current

Original Amount
1,128,000

% of
Uncollectibility
2%

1-30 days overdue

31-60 days overdue

468,000
256,000

4%
8%

61-90 days overdue

130,000

15%

91-120 days overdue

Over 120 days overdue

104,000
96,000

20%
30%

adjustment
216,000.00
36,000.00
(160,000.00)
(60,000.00)
(48,000.00)
50,000.00
(30,000.00)
(52,000.00)
(24,000.00)
vs
ADA by adj
beg bal
wo
expense
DA expense

Journal entry made

187,500.00
187,500.00

beg bal
expense
end bal

62,500.00

adjusted
1,300,000.00
600,000.00
400,000.00
70,000.00

1.50%
8.00%
35.00%
70.00%

Required ADA
(end bal ADA)
19,500.00
48,000.00
140,000.00
49,000.00
256,500.00

beg bal
recoveries
allow before adj
expense
end bal (1)

1,220,000.00

150,000.00

24,400.00
18,720.00
11,840.00
22,500.00

52,000.00
72,000.00
2,110,000.00

10,400.00
21,600.00
109,460.00

468,000.00
148,000.00

82,920.00
(24,000.00)

(58,920.00)
50,540.00
136,000.00
186,540.00

example
a/r-floyd
paid:
entry made
cash
a/r

1,000,000.00

1,200,000.00
1,200,000.00