Question

Build a table/schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Please write the journal entry required to record the full allowance for bad debt needed. The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $28,947 on July 31, 2019. Prepare the required adjusting entry to record Bad Debt Expense for the year. Build a table and establish the correct Allowance: Number of Days Unpaid Total Accounts Receivable Historical % Uncollectible Not yet due 126,500 2.0% 1-30 days past due 89,200 12.0% 31-60 days past due 53,600 18.0% Over 60 days past due 31,800 35.0% 301,100 Total Show Journal entry needed to record correct allowan ce DEBIT CREDIT J/E ACCOUNT a а

Answer 1

Solution:

Computation of Allowance for Uncollectible Accounts
Ageing	Accounts Receivables	% Uncollectible	Required Allowance
Not yet due	$126,500.00	2%	$2,530.00
1-30 days past due	$89,200.00	12%	$10,704.00
31-60 days past due	$53,600.00	18%	$9,648.00
Over 60 days past due	$31,800.00	35%	$11,130.00
Total	$301,100.00		$34,012.00

Journal Entries - Johnston Supplies
Date	Particulars	Debit	Credit
31-Jul	Bad debts expense Dr ($34,012 - $28,947)	$5,065.00
	To Allowance for doubtful accounts		$5,065.00
	(To record bad debts expenses)