Valix Finacc vol 1 Problem 5- 23

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 5-23

1.  Allowance – 1/1/2008 (1% x 2,800,000)                                                                    28,000 

                                                                                                                                      

2.  Allowance – 1/1/2008                                                                                             28,000

     Doubtful accounts recorded in 2008 (1% x 3,000,000)                                            30,000

     Recovery                                                                                                                  7,000

     Total                                                                                                                       65,000

     Writeoff                                                                                                                  (27,000)

     Allowance before adjustment                                                                               38,000

3.  300,000 x 1%                                                                                                              3,000

       80,000 x 5%                                                                                                              4,000

       60,000 x 20%                                                                                                          12,000

       25,000 x 80%                                                                                                          20,000

     Required allowance – 12/31/2008                                                                          39,000

4.  Doubtful accounts                                                                 1,000

            Allowance for doubtful accounts (39,000 – 38,000)                                           1,000