Question

CALCULATOR PRINTER VERSION BALK Problem B-1A Sarasota Corp. uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable Calculate the total estimated bad debts on the below information Number of Days Outstanding Total 0-3031-60 61-90 91-120 Over 120 Accounts Receivable $388,000 $234,000 $82,000 $39,000 $21,000 $12,000 We uncollectible Estimated bad debts EHXSLF ACCOUNTS Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in above. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,600 debit. (Credit account tities are automatically indented when amount is entered. Do not indent manually) Account Tities and Explanation Debit Credit he uncollectible account. (Credit accountries are automatically indented when EN B RF ACCOUNTS of the above accounts, $4,700 is determined to be specifically uncollectible. Prepare the journal entry to write of amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Answer 1

	Accounts receivable	% Uncollectible	Estimated bad debts
0-30	$234000	1%	(234000*1%)= $2340
31-60	82000	4%	(82000*4%)= 3280
61-90	39000	5%	(39000*5%)= 1950
91-120	21000	7%	(21000*7%)= 1470
Over 120	12000	11%	(12000*11%)= 1320
Total	$388000		$10360

  

No.	Account titles and explanation	Debit	Credit
1	Bad debts expense	$13960
	Allowance for doubtful accounts		$13960
	(T record bad debts expense)

Bad debts expense= Debit balance+Total estimated bad debt

= $3600+10360= $13960

No.	Account titles and explanation	Debit	Credit
1	Allowance for doubtful accounts	$4700
	Accounts receivable		$4700
	(T record write off the uncollectible account)