Question

Presented below is an aging schedule for Pharoah Company at December 31, 2021. Number of Days Past Due Not Yet Over Total Customer Due 1-30 31-60 61-90 90 $22,000 $8,400 $13,600 Aneesh 30,400 $30,400 Bird $37,300 Соpe 46,800 4,600 4,900 $35,600 DeSpears 35,600 Others 13,300 115,300 65,700 36,300 $250,100 $100,700 $49,600 $26,900 $37,300 $35,600 Estimated percentage 3% 7% 11% 24% 58% uncollectible $39,052 $3,021 $3,472 $2,959 $8,952 $20,648 Total estimated bad debts At December 31, 2021, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,300.

Journalize the adjusting entry for bad debts at December 31, 2021.

Post the adjusting entry for bad debts at December 31, 2021.

Journalize the 2022 transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.	March 1, a $570 customer balance originating in 2021 is judged uncollectible.
2.	May 1, a check for $570 is received from the customer whose account was written off as uncollectible on March 1.

Post to the allowance account these 2022 events. (Post entries in the order of journal entries posted in the previous part.)

Journalize the adjusting entry for bad debts at December 31, 2022, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,300 and the aging schedule indicates that total estimated bad debts will be $38,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Solutions:

Credit Year Account Title 31-Dec-21 Bad debt expense Dr ($39052 - 8300) To Allowance for Doubtful Accounts Debit $30,752 $30,752 10 Bad debt expense Date 31-Dec Adjusting Explanation | Credit Debit $30,752 Balance $30,752 15 Debit Credit 16 17 18 Allowance for Doubtful Accounts Date Explanation 31-Dec Balance 31-Dec Adjusting Balance $8,300 $39,052 $30,752 19 20 S.no. Credit Date Explanation 01-Mar Allowance for Doubtful Accounts Accounts Receivable Debit $570 22 23 $570 2 $570 01-May Accounts Receivable Allowance for Doubtful Accounts (To reverse write-off) $570 27 28 01-May Cash Accounts Receivable (To record collection of write off) $570 29 30 31 32 33 34 35 36 Debit Credit 37 Allowance for Doubtful Accounts Date Explanation 31-Dec-21 Balance 31-Dec-21 Adjusting 01-Mar-22 Write Off 01-May-22 Reinstate $30,752 Balance $8,300 $39,052 $38,482 $39,052 $570 38 39 40 $570 42 Credit Year Account Title 31-Dec-22 Bad debt expense Dr ($38000 + 1300) To Allowance for Doubtful Accounts Debit $39,300 44 $39,300 49 50 51 52 et152 Sheet153 ) Sheet155 Sheet156 Sheet50 (3)