Question

Required information Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3 [The following information applies to the questions displayed below.) Jarden Company has credit sales of $2,200,000 for year 2017. On December 31, 2017, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,666. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here. Expected Percent Uncollectible 1.25% December 31, 2017 Accounts Receivable $ 440,000 176,000 35, 200 17, 600 3, 520 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due 2.00 6.50 32.75 68.00

Answer 1

Correct solution

Date	General Journal	Debit	Credit
Dec 31	Bad debts expense	$          4,799.60
	Allowance for doubtful accounts		$    4,799.60
	(To record bad debts expense)

Alternate soliution

Date	General Journal	Debit	Credit
Dec 31	Bad debts expense	$          4,800
	Allowance for doubtful accounts		$    4,800
	(To record bad debts expense)

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	Accounts receivables	x	Percent Uncollectable (%)	=	Estimated Uncollectable
Not due:	$      440,000.00	x	1.25%	=	$         5,500.00
1 to 30 days	$      176,000.00	x	2.00%	=	$         3,520.00
31 to 60	$        35,200.00	x	6.50%	=	$         2,288.00
61 to 90	$        17,600.00	x	32.75%	=	$         5,764.00
Over 90	$          3,520.00	x	68.00%	=	$         2,393.60
Estimated balance of allowance for doubtful accounts					$       19,465.60

.

Estimated balance of allowance for uncollectables	$ 19,465.60	Cr
Balance in Allowance for uncollectable account (Cr)	$ 14,666.00	Cr
Total bad debts to be recorded	$    4,799.60	Cr

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