Deck 6: Aging Accounts Receivable Aging

Question 1

WHAT-IF ANALYSIS
Erase the aging information for October and enter the following information for November 30, 2012:

Save the results as AGING4. Print the worksheet. Has the estimated total uncollectible accounts increased or decreased in November Explain.

Answer 1

In the file, erase any data from previous months and input the new data as shown. The new spreadsheet should look like this:
Based on this month's new information, the total estimated uncollectible accounts receivable has increased slightly.

Question 2

CHART ANALYSIS
a. With AGING4 still on the screen, click the Chart sheet tab. Describe what is being plotted out on this chart.
b. Open the AGING2 file and click the Chart sheet tab. Compare the pattern of this chart to the one for AGING4. Note any trends below.
When the assignment is complete, close the files without saving them again.

Answer 2

This is chart depicting month two's estimated uncollectible accounts. It shows the trend in how much money will have to be written off as time goes on. As you can see, there is a sharp decline from not yet due to 1-30 days past due. The amount from 1-30 days and 31-60 days is roughly the same with a decrease at 61-90 days past due. It seems that once an account has gone over 90 days past due, the likelihood of receiving the money is slim.
This is the chart depicting month one's estimated uncollectible accounts. This chart indicates a more steady decline from 1-30 days past due to 31-60 days past due and a slight increase between 31-60 and 91-90 days past due. The trend seems to plateau after 90 days past due and again, the likelihood of collecting those amounts are diminished.

Question 3

PROBLEM DATA
On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers:

REQUIREMENT
You have been asked to estimate the total amount of uncollectible accounts expense as of October 31 by completing the file called AGING.

Answer 3

Open the file listed. In this problem, we will be recording transactions for accounts receivable using the allowance method. The unedited file will look like this:

Question 4

PROBLEM DATA
On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers:

REQUIREMENT
Open the file AGING from the website for this book at cengagebrain.com. Enter all formulas where indicated on the worksheet ( hint: FORMULA1 is =C17). Enter your name in cell A1.
Save your completed file as AGING2. Print the worksheet. Also print your formulas. Check figure: Total uncollectible (cell F28), $1,460.

Question 5

PROBLEM DATA
On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers:

REQUIREMENT
In the spaces provided below, record the journal entry for the provision for uncollectible accounts under each of the following independent assumptions:
a. The Allowance for Doubtful Accounts before adjustment has a credit balance of $500.
b. The Allowance for Doubtful Accounts before adjustment has a debit balance of $250.
c. Assume that October's credit sales were $70,000. Uncollectible accounts expense is estimated at 2% of sales.