Kraft Enterprises owns the following assets at December 31, 2014.
Cash in bank—savings
account
71,690
Checking account
balance
24,420
Cash on hand
8,550
Postdated checks
790
Cash refund due from
IRS
37,430
Certificates of deposit
(180-day)
94,750
What amount should be reported as cash?
Cash to be reported
$ 104,660
Cash in bank—savings account
$71,690
Cash on hand
8,550
Checking account balance
24,420
Cash to be reported
$104,660
Wilton, Inc. had net sales in 2014 of $1,504,600. At December 31, 2014, before adjusting
entries, the balances in selected accounts were: Accounts Receivable $239,900 debit, and
Allowance for Doubtful Accounts $4,300 credit. If Wilton estimates that 3% of its net sales will
prove to be uncollectible.
Prepare the December 31, 2014, journal entry to record bad debt expense. (If no entry is
required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account
titles are automatically indented when the amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2014
Bad Debt Expense
45,138
Allowance for Doubtful Accounts
45,138
Brief Exercise 7-4
Allowance for Doubtful Accounts = ($1,504,600 × 3%) = $45,138
Brief Exercise 7-5
Wilton, Inc. had net sales in 2014 of $1,491,000. At December 31, 2014, before adjusting
entries, the balances in selected accounts were: Accounts Receivable $260,400 debit, and
Allowance for Doubtful Accounts $2,940 credit.
Your answer is correct.
Assume that 11% of accounts receivable will prove to be uncollectible. Prepare the entry to
record bad debt expense. (If no entry is required, select “No Entry” for the account titles
and enter 0 for the amounts. Credit account titles are automatically indented when the
amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2014
Bad Debt Expense
25,704
Allowance for Doubtful Accounts
25,704
Your answer is correct.
Assume Wilton prepares an aging schedule that estimates total uncollectible accounts at
$29,600. Prepare the entry to record bad debt expense. (If no entry is required, select “No
Entry” for the account titles and enter 0 for the amounts. Credit account titles are
automatically indented when the amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December 31, 2014
Bad Debt Expense
26,660
Allowance for Doubtful Accounts
26,660
Allowance for Doubtful Accounts
=
[(11% × $260,400) – $2,940]
=
Your answer is correct.
Account Titles and Explanation
Debit
Credit
