Question

FIUDICI DOTA Auviuco) Rigney Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. Calculate the total estimated bad debts based on the below information. Total 200,000 Number of Days Outstanding 31-60 61-90 91-120 46,000 39,000 23,000 4% 5% 8% 0-30 77,000 1% Accounts receivable % uncollectible Over 120 $15,000 20% Estimated bad debts

Answer 1

Answer:

No	Account titles and Explanation	Debit	Credit
(b)	Bad debt expense	$17,400
	Allowance for doubtful accounts		$17,400
	[To record bad debt expense]
(c )	Allowance for doubtful accounts	$5,000
	Accounts receivable		$5,000
	[To record written off of uncollectibles]
(d)	Accounts receivable	$5,000
	Allowance for doubtful accounts		$5,000
	[To reverse write-off]
	Cash	$5,000
	Accounts receivable		$5,000
	[To record collection of write-off]

Calculations:

	Total	0-30	31-60	61-90	91-120	Over 120
Accounts receivable	200,000	77,000	46,000	39,000	23,000	15,000
% Uncollectible		1%	4%	5%	8%	20%
Estimated bad debts	9400	770	1840	1950	1840	3000

.

Allowance for doubtful accounts,Ending balance (Cr.)	$9,400
Allowance for doubtful accounts, Beginning balance (Dr.)	$8,000
Bad debt expense	$17,400