Question

I 10-Olt method of reporting bad debt expense? (LO 2) Presented below is an aging schedule for Halleran Company Worksheet P18 A B C -NM Not Yet Due 4 Customer Anders Blake Coulson Deleon Others Total $ 22,000 40,000 57,000 34,000 132,000 $285,000 $ 40,000 16,000 D E Number of Days Past Due 1-30 31-60 61-90 Over 90 $10,000 $12,000 6,000 $35,000 $34,000 16,000 14,000 $32,000 $26,000 $35,000 $40,000 7 8 96,000 $152,000 10 Estimated Percentage Uncollectible Total Estimated Bad Debts 3% $4,560 6% $ 1,920 13% 25% $3,380 $8,750 50% $20,000 $ 38,610 12 At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12.000 Instructions a. Journalize and post the adjusting entry for bad debts at December 31, 2020, b. Journalize and post to the allowance account the following events and transactions in the year 2021. 1. On March 31, a $1,000 customer balance originating in 2020 is judged uncollectible. 2. On May 31, a check for $1.000 is received from the customer whose account was written off as uncollectible on March 31. c. Journalize the adjusting entry for bad debts on December 31, 2021. assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $31.600. ed P9.11 (LO 2) Writine Rigney Inc. uses the allowance method to estimate uncollectible accounts

Answer 1

a
	Total estimated bad debts	38610
Less	Allowance for doubtful account (credit balance)	12000
	Bad debt expense	26610
	Adjusting entry	Debit	Credit
	Bad debt expense	26610
	Allowance for doubtful accounts		26610
b		Debit	Credit
1	Allowance for uncollectible accounts	1000
	Accounts receivable		1000
2	Accounts receivable	1000
	Allowance for uncollectible accounts		1000
	Cash	1000
	Accounts receivable		1000
c
	Total estimated bad debts	31600
Add	Allowance for doubtful account (Dedit balance)	800
	Bad debt expense	32400
	Adjusting entry	Debit	Credit
	Bad debt expense	32400
	Allowance for doubtful accounts		32400