Oil, cricket gamblers plunder billions Sunday Times.lk
Two years after the military defeat of Tiger guerrillas, both Sri Lankans and the government are reaping some peace dividends.
The biggest dividend for Sri Lankans is the confidence to move without fear of bomb explosions that had caused loss of lives and limbs. To the government, which quite rightly took the credit for that transition after two and half decades of war and violence, priding itself for development activity and pledging to provide a better environment for those in the once ravaged areas, has become a priority.
Next Saturday's elections to 65 local councils, some of them in the North, are predicated on this factor. Senior cabinet ministers have taken up residence in Jaffna and are busy with intense polls campaigns. The ruling UPFA, the most favoured Tamil National Alliance (TNA), the main opposition United National Party (UNP) and the Janatha Vimukthi Peramuna (JVP) are major contestants. The absence of senior UNP leaders from Colombo has made the party's campaign less than lacklustre. Both the TNA and the JVP complained to the election authorities that the Army was obstructing their campaign. They alleged some officers were even involved in the campaign. The Army claimed its only role in the once beleaguered peninsula was to provide security and they were not involved in politics. There was a dichotomy for the TNA in this situation.
Receivables Example (Allowance Method & Bad Debt Expense)
This is an exercise that is intended to walk you through an receivables exercise where you have to estimate bad debt expense under the allowance ...
Accounting - Bad Debt Expense vs Allowance for Doubtful Accounts?
I am unclear as to what the true definition and meaning of Bad Debt Expense and Allowance for Doubtful Accounts.
For example, an adjustment of $15 is recorded for Bad Debt
This would debit Bad Debt Expense by $15
This would credit Allowance for Doubtful Accounts by $15
Correct?
Naturally, Bad Debt Expense is treated as an Expense but what is Allowance for Doubtful Accounts? Is this considered a liablity?
The allowance account is a contra asset account which is deducted from accounts receivable on the balance sheet to arrive at net receivables. Under the conservatism principle of accounting, receivables should be reported at the amount most likely to be collected rather than the full amount. Before financial statements are prepared an estimate is made of the amount of receivables that will become bad. That way the bad debts expense is recorded in the year when the receivables were earned, and receivables are reported at their estimated net realizable value.
Allowance for Doubtful Debt is considered as a current liability!
but normally at Balance Sheet we will directly use the Account Receivable minus the Amount of Allowance for Doubtful Debt.
help with accounting/bad debt expense?
THe Allowance for Bad Debts is contra to which of the following accounts?
A. accounts receivable
b. bad debt expense
c. cash
d. Sales
Which one is correct?
http://www.google.com/search?hl=en&q=Allowance+for+Bad+Debts+is+contra+to+&btnG=Google+Search
And you will find your answer
The allowance for bad debts is also know as the "allowance for doubtful accounts". Allowance for doubtful accounts is a company's estimate of how many customers are going to default on their bills. That is why it is a contra to accounts receivable.
Intermediate Accounting - Bad Debt Expense Question?
Q:
The following information is available for Reagan Company:
Allowance for doubtful accounts at December 31, 2006:
$ 8,000
Credit sales during 2007: $400,000
Accounts receivable deemed worthless and written off during 2007:$9,000
As a result of a review and aging of accounts receivable in early January 2008, however, it has been determined that an allowance for doubtful accounts of $5,500 is needed at December 31, 2007. What amount should Reagan record as "bad debt expense" for the year ended December 31, 2007?
a) $4,500
b) $5,500
c) $6,500
d) $13,500
I solved it and came up with answer a) 4500.
Is this correct, why or why not?
Sorry, you are not correct. The correct answer is C - 6,500
Starting allowance 8,000
less Charge Offs (9,000)
Plus Bad Debt Expense 4,500
-----------------------------------------------------------------
Allowance at 12/31/07 3,500
Incorrect as it should equal 5,500
Starting allowance 8,000
less Charge Offs (9,000)
Plus Bad Debt Expense 6,500
-----------------------------------------------------------------
Allowance at 12/31/07 5,500
correct
bad debt expense- accounting hw please help?
how do i calculate bad debt expense?
Allowance for Doubtful Accounts
July 5th 6,300 Jan. 1st Balance 12,55...
Oct. 19th 6,275 Setp. 19th 4,875
Dec. 31st 13,000 Nov. 6th 4,750
Dec. 31st Unadjusted Balance
Dec. 31st Adjusting Entry
Dec. 31st Adjusted Balance
Bad Debt Expense
Dec. 31st Adjusting Entry
Percent of Sales Method to Calculate Debt Expense
Bad debts expense is calculated as a straight percentage of the current years credit sales. The percentage is based on prior years experience, modified for changes in current year. Any existing balance in the Allowance for Doubtful Accounts is NOT considered in calculating Bad Debts Expense.
To record bad debt expense use the following equation:
Current Period Sales X Bad Debt %
= Estimated Bad Debts Expense
Accounting question bad debt expense #3?
A company started the year with Accounts Receivable of $15,000 and an Allowance for Uncollectible Accounts of $3,500 (credit). During the year, sales (all on account) were $110,000 and cash collections for sales amounted to $105,000. Also, $2,000 worth of uncollectible accounts were specifically identified and written off. Then, at year-end, the company estimated that 15% of ending Accounts Receivable would be uncollectible. Answer the questions below.
Requirement 1:
What is the journal entry to record bad debts expense? (Omit the "$" sign in your response.)
General Journal
Debit
Credit
(Click for List) Cash Accounts receivable Allowance for uncollectible accounts Sales Write-off expense Bad debt expense Net realizable value Sales returns and allowances Allowance expense Notes receivable
(Click for List) Cash Accounts receivable Allowance for uncollectible accounts Sales Write-off expense Bad debt expense Net realizable value Sales returns and allowances Allowance expense Notes receivable
--------------------------------------------------------------------------------
Requirement 2:
What amount will be shown on the year-end income statement for Bad Debts Expense? (Omit the "$" sign in your response.)
Bad debt expense
$
Requirement 3:
What is the balance in the Allowance for Uncollectible Accounts after all the adjustments have been made? (Omit the "$" sign in your response.)
Allowance for Uncollectible Accounts
$
take your homework to the homework section!!!
Calculation: 15,000 + 110,000 - 105,000 = 20,000 ending A/R balance
(3,500) + 2,000 = (1,500) ending allowance balance
20,000 * 15% = (3,000) required ending allowance balance
(3,000) - (1,500) = (1,500) allowance entry needed:
Debit bad debt expense 1,500
Credit allowance for uncollectible accounts 1,500
Requirement 2:
Bad debt expense $1,500 (the amount of your entry in requirement 1)
Requirement 3:
$3,000 (see calculation in requirement 1)
Kathryn used the second approach instead of the first and she forgot to reduce A/R by the $2,000 write-off. The ending balance of A/R is $18,000. The ending balance of the allowance is $1500 before adjustment. Bad debts expense is 18,000 x 15% = $2,700. The entry is
debit bad debts expense ....2,700
credit allowance .......................2,700
2. $2,700
3. 4,200
Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited?
a.at the end of each accounting period.
b.when a credit sale is past due.
c.whenever a pre-determined amount of credit sales have been made.
d.when an account is determined to be worthless.
Bad Debt Expense...Accounting Help!!!?
Does anyone know what the bad debt expense would be for this problem? I cannot figure it out for anything!!! I took a screen shot of the problem since I cant type it out. I dont even know what the stuff at the bottom is!! Please someone help me Im having a panic attack
Part 1: http://i6.tinypic.com/71vztcz.gif
Part 2: http://i2.tinypic.com/71vt28p.gif
accounting question? Bad debt expense?
What is the purpose of an aging schedule for bad debt expense?
An aging schedule classifies debt based on its age. A typical example of the classifications is 0-30 days, 31-60 days, 61-90 days, 91-120 days, 121-150 days, 151-180 days, 181-360 days, >360 days.
Classifying the debt can help you to determine the risk (older debts are more likely to be uncollectible), to calculate the Bad Debt Reserve needed, and to determine which debts need to be written off. It also helps you focus your collection efforts.
Larry (CPA)
Accounting question: which method of accounting for bad debts expense?
is this: accounts receivable
allowance for doubtful accounts
sales
is it the direct write off method or the allowance method. and can you tell?
When you have an "allowance" account, you are using the Allowance Method.
Direct write off method does not utilize an allowance account.
How do i figure out the bad debt expense and net value of accounts receivable using the adjusted trial balance
the question says, three fourths of the company's revenue is on credit. estimate the bad debt expense and prepare the appropriate journal entry for the company using the net sales method. Also compute the net value of the accounts receivable under each method.
Included is the Adjusted trial balance
Some one please help, thanks
When it is highly probable that some accounts will prove uncollectible and the dollar amount can be reasonably estimated, estimates of bad debt expense should be made and recorded in the period in which the sale takes place.
Two methods of accounting for uncollectible accounts are used in practice—the allowance method and the direct writeoff method.
When the seller can make a reasonable estimate of the dollar amount to be written off, the allowance method should be used.
The allowance method provides an expense for
uncollectible receivables in advance of their write-off. The use of the allowance method serves two purposes. First, it reduces the value of the receivables to the amount of cash
expected to be realized in the future. Second, it matches the uncollectible expense of the current period with the related revenues of the period.
The allowance for uncollectible accounts is reported on the balance sheet as a deduction from accounts receivable and is called a contra asset account. Because the receivables
are reported net of the allowance, the net receivables balance is the amount of cash that is expected to be collected in the near future and thus satisfies the financial reporting objective of providing information about future cash inflows to the company.
The estimate of uncollectibles at the end of a fiscal period should be based on past experience and forecasts of future business activity. When the general economic
environment is favorable, the amount of the expense should normally be less than when the trend is in the opposite direction.
Listed below are the three generally accepted procedures that may be used in applying the allowance method.
1. Percentage of Credit Sales—This estimate of uncollectible accounts is based on a historically determined percentage of each period’s credit sales. For example, if your company’s experience indicates that ultimate uncollectible accounts average about two percent, an adjusting entry would be made at year-end that expenses two percent of the receivables with an offsetting credit to the reserve for
bad-debt.
2. Percentage of Ending Accounts Receivable—Under this method the percentage of the ending balance of accounts receivable not expected to be collected is determined. The allowance account is then adjusted to equal this percentage. The method emphasizes valuation of the receivables at net realizable value on the balance sheet.
3. Aging of Accounts Receivable—This method is similar to Percentage of Ending Accounts Receivable, but it is a more precise variation. Aging considers that the longer a receivable is outstanding, the less likely it is to be collected. A separate estimate of the percentage of uncollectibles is applied to each age classification group instead of applying an overall percentage.
The allowance method emphasizes reporting uncollectible accounts expense in the period in which the sales occur. This emphasis on matching expenses with related revenue is the preferred method of accounting for uncollectible receivables.
In situations in which it is impossible to estimate, with reasonable accuracy, the uncollectibles at the end of the period, the direct write-off method should be used. Under
the direct write-off method, no entries are made until a customer actually defaults on payment, at which time the uncollectible account receivable is written off; therefore, no
allowance account is required.
Email me at kthomsonwrh@yahoo.com and I'll give you my phone number if you are unsure of which to use.
