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Audprob Receivables Number 4

The document contains 4 questions regarding the calculation and accounting of uncollectible accounts and bad debt expense. It provides the accounts written off, recoveries, and charge sales for 3 years to calculate the percentage of uncollectible accounts at 2.5%. It then uses this percentage to calculate bad debt expense for 1985. It also includes information about allowance for bad debts and the under/overstatement of bad debt expense and income over 4 years.

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Ervin Cabangal
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55 views

Audprob Receivables Number 4

The document contains 4 questions regarding the calculation and accounting of uncollectible accounts and bad debt expense. It provides the accounts written off, recoveries, and charge sales for 3 years to calculate the percentage of uncollectible accounts at 2.5%. It then uses this percentage to calculate bad debt expense for 1985. It also includes information about allowance for bad debts and the under/overstatement of bad debt expense and income over 4 years.

Uploaded by

Ervin Cabangal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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QUESTION 2

COMPUTATION FOR % OF UNCOLLECTIBLE


Year Accounts Written Off Recoveries Chage Sales
1981 11,875 950 475,000
1982 20,550 850 850,000
1983 30,000 2,500 1,000,000
TOTAL 62,425 4,300 2,325,000

% OF UNCOLLECTIBLE = Accounts Written Off - Recoveries


Charge Sales
= 62,425 - 4,300
2,325,000
= 2.50%

QUESTION 3
Bad debts expense (1985) = Sales x % of uncollectible
= 1,025,000 x 2.50%
= 25,625
QUESTION 1
ALLOWANCE FOR BAD DEBTS
w/off 18,077 31,250 1984
1200 Recoveries
14,373 END 1984/BEG 1
W/OFF 2,500 25,625 BDEXP 1985
37,498

QUESTION 4
1981 1982 1983 1984
BDExp Recorded 3,000 10,855 21,600 25,537
BDExp Should be 11,875 21,250 25,000 31,250
Understated Expense -8,875 -10,395 -3,400 -5,713
Overstated Income (Recoveries) -950 -850 -2,500
-8,875 -11,345 -4,250 -8,213
1984
Recoveries
END 1984/BEG 1985
BDEXP 1985

TOTAL
60,992
89,375
-28,383
-4,300
-32,683

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