Question

Required information The following information applies to the questions displayed below.) Elite Events Corporation has provided event planning services for several years. The company has been using the percentage of credit sales method to estimate bad debts but switched at the end of the first quarter to the aging of able method. The company entered any entered into the following partial list of transactions during the first quarter a. During January, the company provided services for $260,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $210,000 of accounts receivable. d. On February 15, the company wrote off a $2,600 account receivable. e. During February, the company provided services for $210,000 on credit. On February 28, the company estimated bad debts using 1 percent of credit sales. 9. On March 1, the company loaned $19,000 to an employee who signed a 6% note, due in 9 months h. On March 15, the company collected $2,600 on the account written off one month earlier. On March 31, the company accrued interest earned on the note. On March 31, the company adjusted for uncollectible accounts, based on the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts had an unadjusted credit balance of $8,600 Over 90 0-30 $ 1,200 Customer Aerosmith Biggie Small Others (not shown to save space) ZZ Top Total Accounts Receivable Estimated uncollectible (3) Total $ 2,400 2,400 97,400 6,600 $108,800 Number of Days Unpaid 3 1-60 61-90 $ 1,200 $1,200 41,600 8,600 $1,200 8,600 38,600 6,600 $46,400 $42,800 $9,800 101204 $9,800 358

journal entries for a-j

Answer 1

Date	Account title	Debit	credit
a	Accounts receivable	260000
	service revenue		260000
b	Bad debt expense	2600
	Allowance for doubtful account (260000*1%)		2600
c	Cash	210000
	Accounts receivable		210000
d	Allowance for doubtful account	2600
	Accounts receivable		2600
e`	Accounts receivable	210000
	service revenue		210000
f	Bad debt expense	2100
	Allowance for doubtful account (210000*1%)		2100
g	6% note receivable	19000
	cash		19000
h-1	Accounts receivable	2600
	Allowance for doubtful account		2600
	[Being accounts reinstated written off earlier]
h-2	cash	2600
	Accounts receivable		2600
i	Interest receivable	95
	Interest revenue		95
	[Interest accrued :19000*6%*1/12]
j	Bad debt expense	2462
	Allowance for doubtful account		2462

working:

category	Amount	% of uncollectible	Estimated Balance of allowance account at year end
0-30	46400	3%	46400*3%= 1392
31-60	42800	10%	4280
61-90	9800	20%	1960
over90	9800	35%	3430
	108800		11062

Bad debt expense = Estimated Balance of allowance account at year end -Unadjusted balance

                = 11062 - 8600

                = 2462