Reporting Uncollectible Accounts and Accounts Receivable (FSET) LaFond Company analyzes its accounts receivable at December 31 and arrives at the aged categories below along with the percentages that are estimated as uncollectible. Age Group Current (not past due) 1-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due Over 180 days past due Total accounts receivable Accounts Receivable $375,000 135,000 30,000 16,500 9,000 6,000 $571,500 Estimated Loss % 0.50% At the beginning of the fourth quarter, there was a credit balance of $6,525 in the Allowance for Uncollectible Accounts. During the fourth quarter, LaFond Company wrote off $5,745 in receivables as uncollectible. a. What amount of bad debts expense will LaFond report for the year? $ 0 Transaction 1. Write-off of uncollectible accounts. 2. Recognize bad debts expense. b. What is the balance of accounts receivable that it reports on its December 31 balance sheet? $ 0 c. Report (1) the write-off of accounts receivable as uncollectible and (2) bad debt expense calculated in part a using the financial statement effects template. Note: Use negative signs with your answers, when appropriate. Cash Asset 1% 2% 5% 10% 25% 0 0 + Noncash Assets 0 0 Balance Sheet Contra Assets 0 0 = Liabilities 0 0 + Contributed Capital 0 0 Earned + Capital 0 0 Revenues Income Statement 0 0 Expenses = 0 0 Net Income 0 0
Reporting Uncollectible Accounts and Accounts Receivable (FSET) LaFond Company analyzes its accounts receivable at December 31 and arrives at the aged categories below along with the percentages that are estimated as uncollectible. Age Group Current (not past due) 1-30 days past due 31-60 days past due 61-120 days past due 121-180 days past due Over 180 days past due Total accounts receivable Accounts Receivable $375,000 135,000 30,000 16,500 9,000 6,000 $571,500 Estimated Loss % 0.50% At the beginning of the fourth quarter, there was a credit balance of $6,525 in the Allowance for Uncollectible Accounts. During the fourth quarter, LaFond Company wrote off $5,745 in receivables as uncollectible. a. What amount of bad debts expense will LaFond report for the year? $ 0 Transaction 1. Write-off of uncollectible accounts. 2. Recognize bad debts expense. b. What is the balance of accounts receivable that it reports on its December 31 balance sheet? $ 0 c. Report (1) the write-off of accounts receivable as uncollectible and (2) bad debt expense calculated in part a using the financial statement effects template. Note: Use negative signs with your answers, when appropriate. Cash Asset 1% 2% 5% 10% 25% 0 0 + Noncash Assets 0 0 Balance Sheet Contra Assets 0 0 = Liabilities 0 0 + Contributed Capital 0 0 Earned + Capital 0 0 Revenues Income Statement 0 0 Expenses = 0 0 Net Income 0 0
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter8: Revenue Recognition, Receivables, And Advances From Customers
Section: Chapter Questions
Problem 23E
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
![Reporting Uncollectible Accounts and Accounts Receivable (FSET) LaFond Company analyzes its accounts receivable at December 31 and arrives at the aged categories below along with the percentages that are estimated as
uncollectible. \table [[Age Group, Accounts Receivable, \table [[Estimated], [Loss %]]], [Current (not past due), $375,000, 0.50%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7674b9a2-7e89-4185-9b24-7da401fd79b9%2Ff9b87888-3d22-41b0-a56a-6fe428677a7e%2Fqxvjnyj_processed.png&w=3840&q=75)
Transcribed Image Text:Reporting Uncollectible Accounts and Accounts Receivable (FSET) LaFond Company analyzes its accounts receivable at December 31 and arrives at the aged categories below along with the percentages that are estimated as
uncollectible. \table [[Age Group, Accounts Receivable, \table [[Estimated], [Loss %]]], [Current (not past due), $375,000, 0.50%
Transcribed Image Text:Reporting Uncollectible Accounts and Accounts Receivable (FSET)
La Fond Company analyzes its accounts receivable at December 31 and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
Estimated
Loss %
0.50%
Age Group
Current (not past due)
1-30 days past due
31-60 days past due
61-120 days past due
121-180 days past due
Over 180 days past due
Total accounts receivable
Accounts Receivable
$375,000
135,000
30,000
16,500
9,000
6,000
$571,500
At the beginning of the fourth quarter, there was a credit balance of $6,525 in the Allowance for Uncollectible Accounts. During the fourth quarter, LaFond Company wrote off $5,745 in receivables as
uncollectible.
a. What amount of bad debts expense will La Fond report for the year? $0
b. What is the balance of accounts receivable that it reports on its December 31 balance sheet? $ 0
c. Report (1) the write-off of accounts receivable as uncollectible and (2) bad debt expense calculated in part a using the financial statement effects template.
Note: Use negative signs with your answers, when appropriate.
Transaction
1. Write-off of uncollectible accounts.
2. Recognize bad debts expense.
Cash
Asset
1%
2%
5%
10%
25%
0
0
+
Noncash
Assets
0
0
Balance Sheet
Contra
Assets
0
0
Liabilities
0
0
Contributed
+ Capital
0
0
Earned
+ Capital Revenues
0
0
0
0
Income Statement
Expenses
0
0
Net
= Income
0
0
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