Question

Use the following to answer questions 12-15 At December 31, KC Co reported accounts receivable of $50,000 and an allowance for uncollectible accounts of $300 (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 7% of accounts receivable. 12. S_ _Estimate the amount of uncollectible receivables: 13. $_ When recording the adjusting entry for bad debt expense how much should Allowance for Uncollectible accounts be credited? 14. On January 10, a customer's account balance of $100 is written off as uncollectible. Record the write-off. 15. $ If Net Accounts receivable were $45,000 before the write-off, how much are Net Accounts receivable AFTER the write-off?

Answer 1

12.

Accounts receivables = $50,000

Existing balance of Allowance for doubtful accounts = $300

Estimated uncollectibles = 7% of Accounts receivables

= 50,000 x 7%

= $3,500

13.

Bad debt expense = Estimated balance of allowance for uncollectibles - Existing balance of Allowance for doubtful accounts

= 3,500 - 300

= $3,200

Allowance for uncollectibles should be credited by $3,200

14.

Journal

January 10	Allowance for uncollectible accounts	100
	Accounts receivables		100

15.

Net Accounts receivables before write off = $45,000

Accounts receivables written off = $100

Net Accounts receivables after write off = Net Accounts receivables before write off - Accounts receivables written off

= 45,000 - 100

= $44,900

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