Excel Applications for Accounting Principles

Business

Quiz 6 :

Aging Accounts Receivable Aging

Quiz 6 :

Aging Accounts Receivable Aging

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PROBLEM DATA On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers: img REQUIREMENT You have been asked to estimate the total amount of uncollectible accounts expense as of October 31 by completing the file called AGING.
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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:
img

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PROBLEM DATA On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers: img 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.
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In the open file, input the formulas in the cells indicated using cell references when appropriate. Use a formula to calculate the total amount and total uncollectible. When you are finished inputting all the formulas, your spreadsheet should look like this:
img

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PROBLEM DATA On October 31, 2012, Easy Breezy Beauty Supplies had the following amounts due from its customers: img 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.
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When an accounts receivable is written off as uncollectible, an adjusting entry must be made. The adjusting entries will be made according to the following circumstances.
a. The Allowance for Doubtful Accounts has a credit balance of $500. For this entry, Bad Debt Expense will be debited for $960 ($1,460 - $500) and Allowance for Doubtful Accounts will be credit for $960. A balance of $500 is already there in the account and according to the calculations on the worksheet; a balance of $1,460 is required.
b. The Allowance for Doubtful Account has a debit balance of $250. For this entry Bad Debt Expense will be debited for $1,710 ($1,460 + $250) and Allowance for Doubtful Accounts will be credited with the same amount. There is a debit balance, but according to the calculations of worksheet, a credit balance of $1,460 is required.
c. October's credit sales were $70,000 and uncollectible accounts expense is estimated @ 2% of sales. Bad Debt Expense will be debited for $1,400 (2% of $70,000) and Allowance for Doubtful Accounts will be credited for the same amount.

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WHAT-IF ANALYSIS Erase the aging information for October and enter the following information for November 30, 2012: img Save the results as AGING4. Print the worksheet. Has the estimated total uncollectible accounts increased or decreased in November Explain.
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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.
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