Problem 5-4 Huron Corporation operates in an industry that has a high rate of bad debts. - 88238

Solution Posted by
Mastertutor

Mastertutor

Rating : No Rating
Solution Detail
Price: $4.49
  • From: Business, Accounting
  • Posted on: Tue 10 Feb, 2015
  • Request id: None
  • Purchased: 0 time(s)
  • Average Rating: No rating
Request Description
Problem 5-4 Huron Corporation operates in an industry that has a high rate of bad debts. On December 31, before any year-end adjustments, the balance in Huron’s Accounts Receivable account was $750,000 and the Allowances for Doubtful accounts had a balance of $37,500. The year-end balance reported in the statement of financial position for the Allowance for Doubtful Accounts will be based on the aging schedule shown below. Days Account outstanding Amount Probability of Collection Less than 16 $450,000 .99 16 to 30 150,000 .94 31 to 45 75,000 .80 46 to 60 45,000 .65 61 to 75 15,000 .50 Over 75 15,000 .00 Required: a.) What is the appropriate balance for the Allowance for Doubtful Accounts on December 31? b.) Show how accounts receivable would be presented on the balance sheet prepared on December 31. c.) What is the dollar effect of the year-end bad debt adjustment on the before-tax income for the year?
Solution Description
Attachments
Problem_5-4_FORWatkinsj21_ALL_SOLUTIONS_TO_ALL_THREE_PARTS.docx
Problem_5-4_FOR...