Question

Falling Leaves Furniture Restoration had the following balances at December 31, 2018, before the year-end adjustments: (Click the icon to view the balances and accounts receivable aging schedule.) Requirements 1. Journalize Falling's entry to record bad debts expense for 2018 using the aging-of-receivables method. 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Question Viewer Requirement 1. Joumalize Falling's entry to record bad debts expense for 2018 using the aging of receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts Debit Credit A 31 Dec. Data Table 78,000 Requirement 2. Prepare a T-account to compute the ending balance of Allowance for Bad Debts. Accounts Receivable Allowance for Bad Debts 1.457 The aging of accounts receivable yields the following data: Age of Accounts Recelvable 0-60 Days Over 60 Days Total Receivables Accounts Receivable $ 76,000 $ 2,000 $ 78,000 Estimated percent uncollectible 3% x 23% Allowance for Bad Debts Print Done

Answer 1

Solution 1:

Estimated uncollectibles = 76000*3% + 2000*23% = $2740

Date	Account title	Debit	Credit
31-Dec	Bad debt expense ($2740 - $1457)	1283
	Allowance for bad debts account		1283

Solution 2:

		1457	Unadjusted bal.
		1283	Bad debt expense
		2740	End. Bal.