Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance for uncollectible accounts. Accounts not yet due = $270,000; estimated uncollectible = 5%. Accounts 1–45 days past due = $37,500; estimated uncollectible = 10%. Accounts more than 45 days past due = $15,000; estimated uncollectible = 15%. Before recording any adjustments, Dhaliwal has a debit balance of $67,500 in its allowance for uncollectible accounts. Required: 1. Estimate the appropriate 12/31/2021 balance for Dhaliwal’s allowance for uncollectible accounts. 2. What journal entry should Dhaliwal record to adjust its allowance for uncollectible accounts?

Answers

Answer 1
Answer:

Answer:

1. Age group = A

Amount of Accounts Receivable = B

Estimated % uncollectible = C

Estimated Amount Uncollectible = D

    A                        B                  C                         D(B*C)

Not yet due       $270,000        5%                      $13,500

1-45 days           $37,500           10%                     $3,750

Over 45 days     $15,000           15%                     $2,250

Estimated amount required in Allowance        $19,500

for Doubtful Debts (Credit Balance)

Current Balance in Allowance for                      $67,500

Doubtful Debts (Debit Balance)                                          

Required charge to Bad debts Expense            $87,000

for the year

Thus, the Estimated 12/31/2021 balance for Dhaliwal’s allowance for uncollectible accounts (Credit Balance).

2.                                     Journal Entry

Date       Accounts and Explanation            Debit      Credit  

Dec. 31   Bad debts Expense                      $87,000    

                      Allowance for doubtful accounts         $87,000  

              (To record the estimated bad debts)


Related Questions

How do price changes drive markets toward equilibrium?a. They set new price floors and ceilings. b. They increase or decrease supply or demand. c. They ensure that prices are fair. d. They prevent inflation or deflation.
Conversion costs are a.total equivalent units of conversion costs for the period divided by total conversion costs for the period. b.one part of a cost of production report that is prepared to show greater detail, including multiple cost categories. c.total direct materials cost for the period divided by total equivalent units of conversion costs for the period. d.total conversion costs for the period divided by total equivalent units of direct materials cost for the period.
"Alfonzo and Wendy were arguing about whether their company should issue par value common stock or no-par value common stock. Alfonzo said that par value stock was better because they could use it to help set the market price of the stock. Wendy disagreed. Who was right and why
College-age athletes who drop out of college to play professional sportsa. underestimate the value of a college education.b. are well aware that their opportunity cost of attending college is very high.c. are not rational decision makers.d. are concerned more about present circumstances than
Explain why public goods need to be state provided and why they are under provided in the free market

In 2010, Tara used $50,000.00 from funds she had invested in certificates of deposit as a down payment to buy a house. What function did this portion of her investments serve when she made the down payment?A. unit of exchange.
B. medium of exchange.
C. store of value.
D. unit of account.

Answers

Answer:

B. medium of exchange.

Explanation:

Money as a medium of exchange is used to facilitate the selling and purchasing of goods and services between parties. Money is widely accepted as a standard of value by parties engaged in the exchange of commodities. It means that one party readily accepts an amount of money in exchange for a product or service that is believed to be worth the amount on offer.

Tara is exchanging her $50,000 for the house. Although the money is only a down-payment, it gives her the right to claim ownership of the house. Once she has fully paid for the house using money, she can only lay a claim on the house,  not the money.

How does a business's corporate culture affect employee satisfaction? How does a business's corporation affect customer satisfaction?

Answers

A businesses corporate culture determines how a company's employees and management interact and handle outside business transactions. This should have a clearly articulated set of values that are prominently communicated to all employees and involve the way that firm vows to serve clients, treat colleagues, and uphold professional standards. This clarity and monitoring of roles and outcomes should maintain satisfaction of employees and customers. 

Corporate culture is a set of beliefs and behaviors that characterize members of an organization and define its nature. Organization's goals, strategies, structure, and approaches to labor, customers, investors are all part of the corporate culture.

A dysfunctional corporate culture can negatively affect employee, customer service and because of that also customer satisfaction. Positive culture on the other hand can improve the relationships with the customers and might even help attract new clients.

The government imposes a $1,000 per year license fee on all pizza restaurants. Which cost curves shift as a result? Select one: a. average total cost and average fixed cost. b. average total cost and marginal cost. c. average variable cost and marginal cost. d. average variable cost and average fixed cost.

Answers

Answer:

correct option is a. average total cost and average fixed cost.

Explanation:

given data

license fee  = $1,000 per year

solution

we know that cost curves shift will be express as when the increase in the price of factor of production increase cost and shift cost curves upward

so cost curves shift by the average total cost and the average fixed cost

so here correct option is a. average total cost and average fixed cost.

Final answer:

The government's $1,000 license fee increases both the average total cost and average fixed cost, but does not affect marginal cost. The average fixed cost curve shows the effect of spreading the overhead, meaning as more output is produced, the fixed cost per unit decreases.

Explanation:

The government imposes a $1,000 per year license fee on all pizza restaurants. This fee is a fixed cost, which means it doesn't change with the level of output produced. It will affect the restaurant's total costs, but not the costs associated with producing one more unit, or the marginal cost. Therefore, the cost curves that will shift are the average total cost and the average fixed cost.

A common name for fixed cost is "overhead." If you divide the fixed cost by the quantity of output produced, you get the average fixed cost. With a supposed fixed cost of $1,000, the average fixed cost curve would start from the intercept at $1,000 on the vertical axis (when output is zero), and it would decrease as the quantity of output increases, which represents the "spreading the overhead." This means that as you produce more, the fixed cost is spread over more units, and therefore the cost per unit decreases.

why does depreciation and amortization affect a firm's cash balance on the balance sheet if it is a non-cash expense?

Answers

Answer:

When you are preparing a statement of cash flows, you start with operating income. Operating income is basically net income + adjustments. The adjustments that always increase the cash flows are depreciation expense and amortization expense. Even though they are not actual cash expenses, they reduce taxable income and therefore, total taxes paid.

When you use paper money to pay for food, the money is a

Answers

When you use paper money to pay for food the money is considered a medium of exchange.

Iceberg storage, a leading hard drive manufacturer, recently filed for bankruptcy. While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained earnings in the effort to improve its hard drives. Once the hard-drive market drastically declined, Iceberg Storage was unable to capitalize on the new technology. Which of the following does this scenario best illustrate?a. causal ambiguity.b. knowledge diffusion.
c. social complexity.
d. path dependence.

Answers

Answer:

d. path dependence

Explanation:

Based on the scenario being described within the question it can be said that this is best illustrating the concept of path dependence. This term refers to how the set of decisions that individuals face is limited due to decisions that they have made in the past that will influence them, even though the past circumstances may no longer be relevant. As is the case in this scenario as Iceberg storage decided to stick with physical devices because it is what they did in the past and it worked out for them, but since times changed it did not work out this time.

Answer:

D

Explanation:

Path dependence

Path dependency occurs because it is often easier or more cost-effective to continue along an already set path than to create an entirely new one.

While most of Iceberg's competitors were shifting away from physical data storage devices toward online cloud storage services, Iceberg invested most of its retained earnings in the effort to improve its hard drives. Iceberg should have shifted away this is a case of path dependence

Other Questions