UNIVERSITAS INDONESIA

ACCOUNTING
CHAPTER 5

Group 4

Muhammad Fariz Haikal 1206334291 Mutia Imro Atussoleha 1206334303 Shervani Andita P. 1206334594

Magister Management
Fakultas Ekonomi Universitas Indonesia
Jakarta
2013

Problem 5-4
As Of 31 Dec
A/R =750.000
AFDA=37.500
Days Account Outstanding|Amount|Expected Percentage Uncollectible*|Estimated Uncollectible| 0-15 days|$450,000|0.01|$ 4,500|
16-30 days| 150,000|0.06| 9,000|
31-45 days| 75,000|0.20| 15,000|
46-60 days| 45,000|0.35| 15,750|
61-75| 15,000|0.50| 7,500|
Balance for Allowance for Doubtful Accounts|$51,750|

*(1-Probability of collection.)

Days Account Outstanding > 75 days, has amount = $15,000, Expected Precentage Uncollectible=0% would be written off immediately and not be considered when determining the proper amount of the Allowance for Doubtful Accounts.
b.
Account Receivable|$735,000|
Allowance for Doubtful Accounts.|$ 51,750|
Net Accounts Receivable|$683,250|

* Account Receivable= $750000 - $ 15.000 = $735.000

c. The year-end bad debt adjustment would decrease the year’s before-tax income by $29,250, as shown below:
Estimated amount required in the Allowance for Doubtful Accounts|$51,750|
Balance in the account after write-off of bad accounts but before adjustment|$22,500|
Required charge to expense|$29,250|

*$22500=$37500(Allowance for Doubtful Accounts ) -$15000 (Bed Debt Expense)
*Required charge to expense = $51750 - $ 22500 =$29250

Case 5-1
Question 1
1.|Accounts Receivable|9,965,575||
|Sales||9,965,57|
2.|Cash|9,685,420||
|Accounts Receivable||9,685,42|
3.|Allowance for Doubtful Accounts|26,854||
|Accounts Receivable||26,854|

4. Debit Cash $3,674 ($2,108 for one account and $1,566 as partial payment on another). The rest of the transaction