Why on the % of sales method you have to add the four thousand to the allowance for doubtful accounts but on the other two you use the estimate totals as the end balance in allowance for doubtful accounts and solve for the adjusting amount? I hope this question makes sense.
The percentage of sales method estimates the amount of bad debt expense a company will incur based on the amount of sales it makes on credit. For example, if a business made $100,000 worth of sales on credit and estimates bad debt to be 2 percent of credit sales, it would ADD $2,000 to the allowance for doubtful accounts. (Notice the word: ADD) However, The percentage of receivables method is similar except the base for the calculation is the current amount of accounts receivable the business has ACCUMULATED. The resulting figure indicates what the allowance for doubtful accounts BALANCE should be. For example, say a company estimates that 1 percent of accumulated receivables are usually uncollectible and the receivables balance is $500,000. Under this method, the BALANCE of the allowance for doubtful accounts should be $5,000. Credit to quickbooks.intuit.com/r/accounting-money/how-to-estimate-uncollectible-accounts/
Do you mean how do you choose the percentage that you use? It should be based on your past collection rate. If you typically collect 98% of your receivables, then the percent uncollectible will be 2%.
Accounting Videos the question didn’t state the percentage but it stated that “ during 2017, 740,000 in in accounts receivable was written of as uncollectable. Out Of this amount receivables of 24,000 was unexpectedly collected. so I’m assuming is the first one minus the second will give me the figure for “accounts receivable” my question now is how much percentage is that. This amount I’ll use it to calculate for my first 30 days but how do I know which percent is that, and how much percentage I’ll use for the subsequent days . At the end of the 2017 an aging of accounts receivable indicated a need for 80,000 allowance to cover accounts outstanding
To prepare an adjusting entry on dec 31 to increase an allowance for doubtful accounts to 80000. 2) prepare entries to to record the 24,000 receivables which where unexpectedly collected
This was a full class in 9:49. ¡Thanks for this video!
Fool? not she is amazing. She explained three methods in less than 10 mins!! also she is so a
pretty woman.
I love your videos!!! So helpful and clear!!!!
YOU SAVED ME, i have accounting final tomorrow and i got the point!! thank you!
Good luck on your final!!
thank you for your all videos. really those are very helpful for my studies.
I subscribed because of the way you explained everything
Oh my... such a great instructor
Is this also known as AR reserve?
How much I love your explanation 😍but you soo fast in explaining 😂
Use the slow-down feature on UA-cam! I know I talk fast (my poor students)
@@BrandyDudas btw thanks for your attitude
Why on the % of sales method you have to add the four thousand to the allowance for doubtful accounts but on the other two you use the estimate totals as the end balance in allowance for doubtful accounts and solve for the adjusting amount? I hope this question makes sense.
The percentage of sales method estimates the amount of bad debt expense a company will incur based on the amount of sales it makes on credit. For example, if a business made $100,000 worth of sales on credit and estimates bad debt to be 2 percent of credit sales, it would ADD $2,000 to the allowance for doubtful accounts. (Notice the word: ADD)
However, The percentage of receivables method is similar except the base for the calculation is the current amount of accounts receivable the business has ACCUMULATED. The resulting figure indicates what the allowance for doubtful accounts BALANCE should be. For example, say a company estimates that 1 percent of accumulated receivables are usually uncollectible and the receivables balance is $500,000. Under this method, the BALANCE of the allowance for doubtful accounts should be $5,000.
Credit to quickbooks.intuit.com/r/accounting-money/how-to-estimate-uncollectible-accounts/
@@sarayoung5954 thanks! this helps a lot!
Thank you so much. You saved my life T-T
You are so welcome!
I want help related to sum plss help me
Excellent video!
How to estimate percentage of uncollectables that’s my problem
Do you mean how do you choose the percentage that you use? It should be based on your past collection rate. If you typically collect 98% of your receivables, then the percent uncollectible will be 2%.
Accounting Videos the question didn’t state the percentage but it stated that “ during 2017, 740,000 in in accounts receivable was written of as uncollectable. Out Of this amount receivables of 24,000 was unexpectedly collected. so I’m assuming is the first one minus the second will give me the figure for “accounts receivable” my question now is how much percentage is that. This amount I’ll use it to calculate for my first 30 days but how do I know which percent is that, and how much percentage I’ll use for the subsequent days . At the end of the 2017 an aging of accounts receivable indicated a need for 80,000 allowance to cover accounts outstanding
How do you break 716,000 (receivable) into aging brackets after the first 30 days, you didn’t explain that in the video
What is the question asking you to do. Is it asking you to estimate the bad debt provision or to write off the bad debts.
To prepare an adjusting entry on dec 31 to increase an allowance for doubtful accounts to 80000. 2) prepare entries to to record the 24,000 receivables which where unexpectedly collected
really useful. thanks a lot
Thank you.
great math 800,000x 5% is 4000 and 60,000 is 3000?
thank you so so much omg
.005=4000
800000 x .5 is 400000
You are tough and right
slow down, you speak like your are racing
Do more fast fool!!!🙅