Question

Crystal Clear Cleaning uses the allowance method to estimate bad debts. Consider the following April 2019 transactions for Crystal Clear Cleaning:

More Info ntri a's bun Apr. 1 Performed cleaning service for Debbie's D - list for $13,000 on account with terms n/20. 10 Borrowed money from First Regional Bank, $30,000, making a 180 day, 12% note 12 After discussions with More Shine, Crystal Clear has determined that $230 of the receivable owed will not be collected. Wrote off this portion of the receivable. 15 Sold goods to Warner for $9,000 on account with terms n/30. Cost of Goods Sold was $4,500 28 Sold goods to Lelaine, Inc. for cash of $2,800 (cost $840). 28 Collected from More Shine, $230 of receivable previously written off. 29 Paid cash for utilities of $150 30 Created an aging schedule for Crystal Clear Cleaning for accounts receivable. in the Print | Done

Answer 1

1.

Date	General Journal	Debit	Credit
Apr. 1	Accounts receivable	13000
	Service revenue		13000
10	Cash	30000
	Notes payable		30000
12	Allowance for bad debts	230
	Accounts receivable		230
15	Accounts receivable	9000
	Sales revenue		9000
15	Cost of goods sold	4500
	Inventory		4500
28	Cash	2800
	Sales revenue		2800
28	Cost of goods sold	840
	Inventory		840
28	Accounts receivable	230
	Allowance for bad debts		230
28	Cash	230
	Accounts receivable		230
29	Utilities expense	150
	Cash		150
30	Bad debts expense	3711
	Allowance for bad debts		3711

Working:

Outstanding Days	Amount $	Estimated Uncollectible	Uncollectible Amount $
1-30 days	7000	3%	210
31-60 days	10000	20%	2000
More than 60 days	5870	30%	1761
Total			3971
Unadjusted balance in Allowance for bad debts (credit)			260
Adjustment			3711

2.

Crystal Clear Cleaning
Balance Sheet (partial)
April 30, 2019
Current assets
Accounts receivable	22870
Less:Allowance for bad debts	3971
Net accounts receivable	18899