Asked by Jasmine Simpson on Jun 30, 2024
Verified
Thatcher Company had a January 1,credit balance in its Allowance for Doubtful Accounts of $4,000 for the current year.The following transactions and events affected the Allowance for Doubtful Accounts during the current year:
What amount should appear in the allowance for doubtful accounts in the December 31,balance sheet for the current year?
Allowance for Doubtful Accounts
A contra-asset account that represents estimates of receivables that may not be collectible.
Transactions and Events
Transactions refer to the economic activities that impact financial status, and events are occurrences that can affect the company's financial position.
Balance Sheet
A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.
- Achieve understanding of the fundamental principles and methods used in accounting for receivables deemed non-collectible.
- Comprehend the strategies for determining bad debts expense, including the allowance method and the direct write-off method.
- Evaluate the fiscal consequences of unsound debt accounting practices on the financial disclosures.
Verified Answer
RG
Learning Objectives
- Achieve understanding of the fundamental principles and methods used in accounting for receivables deemed non-collectible.
- Comprehend the strategies for determining bad debts expense, including the allowance method and the direct write-off method.
- Evaluate the fiscal consequences of unsound debt accounting practices on the financial disclosures.