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Friday, August 6, 2010

Valix Finacc vol 1 Problem 5-11

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 5-11


a.  Required allowance (5% x 600,000)                                                                      30,000
     Add: Debit balance in allowance account                                                        10,000
     Doubtful accounts expense                                                                                 40,000

     Doubtful accounts                                                             40,000
            Allowance for doubtful accounts                                                                 40,000

b.  Required allowance                                                                                            50,000
     Add: Debit balance in allowance account                                                        10,000
     Doubtful accounts expense                                                                                 60,000

     Doubtful accounts                                                             60,000
            Allowance for doubtful accounts                                                                 60,000
                                                                                             
c.  Doubtful accounts (2% x 1,900,000)                                                38,000
            Allowance for doubtful accounts                                                                 38,000

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