Intermediate Accounting Homework

The detailed questions are in the file provided, and you can answer them directly in the original document.

TRADITIONAL HOMEWORK ITEMS – Spring 2024 – ACT 3391
General Instructions for the Traditional Homework – refer to the instructions for traditional item no. 3.
18. (8 points) Receivables and bad debts.
a. Heather has an accounting year-end of December 31. Heather prepares quarterly financial statements. Heather uses an
allowance method for bad debts. On 01-01-21, Heather’s allowance for doubtful accounts had a $50,000 balance. During
2021, Heather recorded (1) $59,000 of estimated bad debts expense, (2) $43,000 of write-offs, and (3) $4,200 of
subsequent collections of ARs previously written off. An aging analysis of Heather’s receivables indicates a required
balance in Heather’s allowance for doubtful accounts of $68,000
i.
Prepare the entries Heather made for items (1), (2), and (3).
ii.
On the basis of the information given, as of year-end 12-31-21, what was the UNADJUSTED balance in
Heather’s allowance for doubtful accounts?
iii.
Prepare the year-end adjusting journal entry Heather should make for the year ended 12-31-21.
iv.
On the basis of the information given, for the year ended 12-31-21, what was Heather’s total bad debts expense
amount?
b.
Sonja’s 12-31-16 unadjusted trial balance shows accounts receivable of $2,400,000 and an allowance for doubtful
accounts of $25,000. During 2016, Sonja wrote off $45,000 of receivables. During 2016, Sonja had $2,000 of subsequent
collections of receivables previously written off. Sonja only records AJEs once each year as of year-end 12-31.
i.
What was the balance in Sonja’s allowance for doubtful accounts as of 01-01-16?
ii.
If Sonja estimates 2.5% of her ARs will be uncollectible, prepare the AJE she should make to record bad debt
expense for 2016.
iii.
After making the AJE in part (b), what will be the net realizable value of Sonja’s receivables as of 12-31-16?
iv.
On the basis of the information given, for the year ended 12-31 16, what was Sonja’s total bad debts expense
amount?
19. (1 point) The following information pertains to R for 2015:
•
R’s 12-31-15 AR aging analysis indicates a required balance in the allowance for doubtful accounts of $105,000.
•
Per its 12-31-15 unadjusted trial balance, R’s gross accounts receivable balance was $2,750,000.
•
Per its 12-31-15 unadjusted trial balance, R’s allowance for doubtful accounts balance was $111,000
On the basis of the above, prepare the AJE R should make for the year ended 12-31-15 to adjust its bad debts expense.
20. (3 points) The following information pertains to R:
•
Gross accounts receivable balance as of 01-01-15 was $82,000
•
Allowance for doubtful accounts balance as of 01-01-15 was $6,000
•
Total sales during 2015 (all sales were on a credit basis) were $930,000
•
AR write-offs during 2015 were $5,000
•
R’s 12-31-15 AR aging analysis indicates a required balance in the allowance for doubtful accounts of $6,250.
•
The NRV of R’s receivables as of 12-31-15 was $93,000.
On the basis of the above, how much cash did R collect from its ARs during 2015?
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