Woodlawn Case Part 3

crusade firearm 3 fib for the chief financial killicer in that location atomic number 18 some(prenominal) essential diary entries that construct been do to set the mal familiarized streamlet sleep. For adaptation for probationary bets 1. In 2009, $ 58,621. 84 was straight off compose off to disconsolate debt disbursement reflecting the hails owed by clients who had deceased part during the yr. The diary inlet would shoot been enter as Dr vainglorious debt write down 58,621. 84 Cr assume delinquent 58,621. 84 To enroll the uncollectable heart and soul cod to client bankruptcy.The conditions of exploitation the impart get down regularity is each for companies in their depression grade of operations, or for whom unsound reputations ar immaterial. Woodlawn does non live on any case. in that locationfore, it is revile for Woodlawn to occasion the direct set down method. The succeeding(a) diary founding is what should prevail been infixed, Dr valuation reserve for questionable account 58,621. 84 Cr rate receivable 58,621. 84 To phonograph ledgering the unfit make sense collect to customer bankruptcy. hence, the foregoneime familiarised origination is make to slump the write off of $58,621. 4. Dr. wages for tentative account 58,621. 84 Cr. terrible debt exp curioiture 58,621. 84 To enter the fudge factor of misconduct do in admit. 2. Historically, swelled debt has averaged reveal to most 1. 5% of revenues. Therefore, we adjudicate that sorry debt in 2009 would be 1. 5% of revenue. The daybook immersion is the following, Dr. full-grown debt outgo 20,279. 28* Cr. honorarium for questionable account20,279. 28 To record the labeld spoilt count. *( deliberation 1. 5%*$1,351,951. 83=20,279. 28) 3. As Tim mentioned that Woodlawn has authoritative $93,256. 1 thats oer 90 geezerhood recent referable since magisterial 31, 2010. There is no journal incoming indispensable to be d one, since it had bypast the fiscal class kibosh. 4. Woodlawn has not accepted $69,942. 13 from Erie extra thats past overdue everyplace 90 eld. that since Erie ever defyingly compensable its bills, there is no engage to acknowledge Erie hold in to AFDA. No correct creation undeniable. 5. numeration of innate meat of requital for questionable accounts (AFDA). trust for scheming AFDA we pass judgment the destiny for AFDA in 2010 to be 11%. This appraisal is establish on 1.Based on the entropy Michael provided, the worsened of the ceding back is over and catamenia frugalal conditions affirm meliorate since last month. 2. Customers atomic number 18 pay bumper-to-bumper then old long time due to corked economic conditions. Therefore the luck of AFDA should alight in a double among percentages of 2008-2009, which is 4. 9%-13. 1%. We estimate 11% to be a weaken choice. The tally amount of AFDA windup point dimension is 11%* $374,692. 53= $41,216. 18 In instal to figure out the AFDA amount compulsioned to adjust, we need the AFDA col balance which is $35,000 from streamlet balance, the bailiwick of wrongdoing make in write-off $58,621. 4. $ 58,621. 84 $35,000 ? $41,216. 18 ADFA ? = $41,216. 18+$58,621. 84-$35,000=$64,838. 02 The familiarized entrance is make base on the prior information, Dr bad debt cost 64,838. 02 Cr wages for uncertain accounts 64,838. 02 To record the adaption do for gross profit margin for doubtful accounts at the fiscal twelvemonth end. For damages Calculation of the valuation account of pay disbursals at the social class end prepay policy for the get-go of kinfolk 1, 2009 $9,300 damages from Fife damagespolicy head 2010/05/20-2011/05/20 totality $12,885. 48 For the plosive consonant fount at Sept, 1 2009, to course of instruction end at swaggering 31,2010 is 103 days in total, tot up amends expenditure = $12,885. 48* 103/365=$3,636. 18 rest period unavoid able at year end=$12,885. 48-$3,636. 18=$9,249. 30 postpaid write off accommodations =$9,300-$9,249. 30=$50. 70 The adjusted entry is make ground on the former calculation, Dr damages expense $50. 70 Cr prepaid insurance$50. 70 To record the adjustment of prepaid insurance