Table 9-13 Davidson Services
at January 1, Davidson Services Has

question 84

Short Answer

Table 9-13 Davidson Services
At January 1, Davidson Services has the following balances:
$$\begin{array} { | l | l | l | l | l | } \hline \text { Date } & \text { Accounts Receivable } & \text { Debit } & \text { Credit } & \text { Balance } \\\hline & & & & 9,000 \text { Dr. } \\\hline & & & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | c | r | } \hline \text { Date } & \begin{array} { c } \text { Allowance for } \\\text { Doubtful Accounts }\end{array} & \text { Debit } & \text { Credit } & \text { Balance } \\\hline & & & & 800 \mathrm { Cr } \text {. } \\\hline & & & & \\\hline\end{array}$$ $$\begin{array} { | l | l | l | l | l | } \hline \text { Date } & \text { Bad Debts Expense } & \text { Debit } & \text { Credit } & \text { Balance } \\\hline & & & & \\\hline & & & & \\\hline\end{array}$$ During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400.
-Refer to Table 9-13 to answer the following assuming that Davidson records uncollectible account expense at the end of the year using the percent-of-sales method, and applies a rate of 1.1% based on past history.
1. Prior to the year-end entry to adjust the bad debts expense, what is the balance in accounts receivable?
2. After the year-end entry to adjust the bad debts expense, what is the ending balance in the allowance for uncollectible accounts?
3. After the year-end to adjust the bad debts expense, what is the ending balance of net accounts receivable?
4. If the business uses the direct-write-off method what will be the amount for uncollectible accounts expense?

Comprehend the difference between efficiency and effectiveness within an organization.

Recognize the importance of delegation and follow-up in management.

Understand the impact of departmentalization on organizational structure.

Acknowledge the importance of adaptability and flexibility for future organizational effectiveness.

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