Question

My answers seem wrong, please check if I made sign erros

Estimating Uncollectible Accounts and Reporting Accounts Receivable 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. Accounts Estimated Age Group Receivable Loss % 0-30 days past due $ 180,000 196 31-60 days past due 40,000 61-120 days past due 22,000 121-180 12,000 Over 180 days past due 8,000 Total accounts receivable $262,000 The balance of the allowance for uncollectible accounts is $1,040 on December 31, before any adjustments. (a) What amount of bad debts expense will LaFond report in its income statement for the year? $ 5,860 (b) Use the financial statement effects template to record LaFond's bad debts expense for the year. Use negative signs with your answers, when appropriate. Balance Sheet Income Statement Noncash Contributed Earned Transaction Cash Asset + Assets - Liabilities + Capital + Capital Revenue - Expenses = Net Income Record bad debts expense 0 (5,860) 0 (5,860) 5,860 (5,860) (c) What is the balance of accounts receivable on it December 31 balance sheet? $ 255,100

Answer 1

Answer is given below

mistake was in part (b). In Balance Full allowance for doubtful debts should be considered.

Income statement will have differential only

Estimated Loss % Accounts Age Group Receivable 0-30 days past due $180,000 31-60 days past due $40,000 61-120 days past due $22,000 120-181 $12,000 Over 180 days past due $8,000 Total Accounts receivabl $262,000 5% Allowance $1,800 $800 $1,100 $1,200 $2,000 $6,900 10% 25% Opening Balance Total Allowance Balance to be provided $1,040 $6,900 $5,860

Cash Asset Transaction Balance Sheet Contributed. = Liabilities + Capital I Non Cash Assets $6,900 Earned Capital Income statement Net Revenue - Expenses = Income $5,860 $5,860 Record Bad Debt Expense

c) Balance of Accounts Receivable Balance Less: Allowance for Bad Debts Balance of AR on December 31 $262,000 -$6,900 $255,100