series of unrelated situations

ACCOUNTING P7-2 (Bad-Debt Reporting) Presented below are a series of unrelated situations.1. Halen Company’s unadjusted trial balance at December 31, 2010, included the following accounts.Debit…

ACCOUNTING

P7-2
(Bad-Debt Reporting) Presented below are a series of unrelated
situations.1. Halen Company’s unadjusted trial balance at
December 31, 2010, included the following accounts.Debit
CreditAllowance for doubtful accounts $4,000Net Sales
$1,200,000Halen Company estimates its bad debt expense to be 1
and 1/2% of net sales. Determine its bad debt expense for 2010.2.
An analysis and aging of Stuart Corp. accounts receivable at December
31, 2010, disclosed the following.Amounts estimated to be
uncollectible $ 180,000Accounts receivable 1,750,000Allowance
for doubtful accounts (per books) 125,000What is the net
realizable value of Stuart’s receivables at December 31, 2010?3.
Shore Co. provides for doubtful accounts based on 3% of credit sales.
The following data are available for 2010.Credit sales during
2010 $2,400,000Allowance for doubtful accounts 1/1/10
17,000Collection of accounts written off in prior years
(customer credit was reestablished) 8,000Customer accounts
written off as uncollectible during 2010 30,000What is the
balance in the Allowance for Doubtful Accounts at December 31,
2010?4. At the end of its first year of operations, December
31, 2010, Darden Inc. reported the following information.Accounts
receivable, net of allowance for doubtful accounts $950,000Customer
accounts written off as uncollectible during 2010 24,000Bad
debt expense for 2010 84,000What should be the balance in
accounts receivable at December 31, 2010, before subtracting the
allowance for doubtful accounts?5. The following accounts were
taken from Bullock Inc.’s trial balance at December 31, 2010.Debit
CreditNet credit sales $750,000Allowance for doubtful
accounts $14,000Accounts receivable 310,000If doubtful
accounts are 3% of accounts receivable, determine the bad debt
expense to be reported for 2010.InstructionsAnswer the
questions relating to each of the five independent situations are
requested.
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