Question

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction General Journal Debit Credit 53,700 Bad debt expense Allowance for uncollectible accounts 53,700 39,900 Bad debt expense Allowance for uncollectible accounts 39,900 c. Bad debt expense 44,157 Allowance for uncollectible accounts 44,157 Required 1 Required 3 >

Could you please help me to figure out the answer for required 3? I don't know why it showed wrong. Thank you so much!

Answer 1

Solution 3:

Ending balance in accounts receivables = Beginning receivables + Credit sales - Collection - Write off

= ($472,000 + $38,000) + $1,790,000 - $1,870,000 - $43,000

= $387,000

Ending balance in allowance for doubtful accounts before adjusting entry = Beginning balance - Write off + Bad debts recovered previously written off

= $38,000 -  $43,000 + $3,800 = $1,200 debit

Computation of Allowance for Uncollectible Accounts
Ageing	% of year end receivables in Group	Accounts Receivables	% Uncollectible	Required Allowance
0-60 days	65%	$251,550	4%	$10,062
61-90 days	15%	$58,050	10%	$5,805
91-120 days	15%	$58,050	30%	$17,415
Over 120 days	5%	$19,350	50%	$9,675
Total		$387,000		$42,957

a. Net accounts receivables = $387,000 - ($53,700 - $1,200) = $334,500

b. Net accounts receivables = $387,000 - $38,700 = $348,300

c. Net accounts receivables = $387,000 - $42,957 = $344,043