At December 31 of the current year, Roberts Company had a balance of $364,000 in its Accounts Receivable account and a balance of $3,000 in the Allowance for Doubtful Accounts. The company has aged its accounts as follows:
In the past, the company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over 180 days past due. The company bases its bad debt expense on the aging analysis.
Required:
a. Determine the amount of bad debt expense for the year.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
c. On January 15 of the subsequent year, Roberts Company wrote off the account of B. Jensen, $1,200. What if the effect on gross receivables and total assets of the write off?
d. On February 20 of the subsequent year, Roberts Company collected the $1,200 on the Jensen account written off on January 15. What is the effect on the Allowance for Doubtful Accounts and Total Assets as a result of the recovery?

Question

At December 31 of the current year, Roberts Company had a balance of $364,000 in its Accounts Receivable account and a balance of $3,000 in the Allowance for Doubtful Accounts. The company has aged its accounts as follows: 
  In the past, the company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over 180 days past due. The company bases its bad debt expense on the aging analysis.
Required:
a. Determine the amount of bad debt expense for the year.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
c. On January 15 of the subsequent year, Roberts Company wrote off the account of B. Jensen, $1,200. What if the effect on gross receivables and total assets of the write off?
d. On February 20 of the subsequent year, Roberts Company collected the $1,200 on the Jensen account written off on January 15. What is the effect on the Allowance for Doubtful Accounts and Total Assets as a result of the recovery?

Quizplus · Accepted Answer

The Answer of At December 31 of the current year, Roberts Company had a balance of $364,000 in its Accounts Receivable account and a balance of $3,000 in the Allowance for Doubtful Accounts. The company has aged its accounts as follows: 
  In the past, the company has experienced losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 30% of balances over 180 days past due. The company bases its bad debt expense on the aging analysis.
Required:
a. Determine the amount of bad debt expense for the year.
b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear in the December 31 balance sheet.
c. On January 15 of the subsequent year, Roberts Company wrote off the account of B. Jensen, $1,200. What if the effect on gross receivables and total assets of the write off?
d. On February 20 of the subsequent year, Roberts Company collected the $1,200 on the Jensen account written off on January 15. What is the effect on the Allowance for Doubtful Accounts and Total Assets as a result of the recovery?

At December 31 of the Current Year, Roberts Company Had