HU, Department of Accounting & Finance

Fundamentals of Accounting – I: Practice questions on Accounting for uncollectible accounts receivable

1. Assume the following data for EX Company on Dec. 31, 2010

a. Estimate bad debt expense for Dec. 31, 2010

b. Record adjusting entries for Dec. 31, 2010

2. At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful
Accounts has a credit balance of $7,500; and net sales for the year total $3,500,000. Bad debt expense is
estimated at 1 ⁄2 of 1% of net sales.
Determine:
a. The amount of the adjusting entry for uncollectible accounts;
b. The net realizable value of accounts receivable.

3. You prepared the following partially completed aging of receivables schedule for XYZ company on Dec
31, 2012:

Required:

a. Based on the information provided above Estimate the allowance for doubtful accounts,
b. Assume that the allowance for doubtful accounts for XYZ has a credit balance of $16,175 before
adjustment on Dec 31. Journalize the adjusting entry for uncollectible accounts.
HU, Department of Accounting & Finance
Fundamentals of Accounting – I: Practice questions on Accounting for uncollectible accounts receivable

4. At the end of the current year, Accounts Receivable has a balance of $800,000; Allowance for Doubtful
Accounts has a credit balance of $7,500; and net sales for the year total $3,500,000. Using the aging
method, the balance of Allowance for Doubtful Accounts is estimated as $30,000. Determine
a. The amount of the adjusting entry for uncollectible accounts;
b. The net realizable value of accounts receivable.
5. Company reports the following financial information before adjustments.

Required: Prepare the journal entry to record bad debt expense assuming SS Company estimates bad debts;

a. At 1% of net sales and

b. At 5% of accounts receivable