Question

Cornerstone Exercise 5-27 (Algorithmic) Aging Method On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable $1,281,600 Allowance for Doubtful Accounts (a credit 50,000 balance) During 2019, Hungryman had $18,100,000 of credit sales, collected $17.945,000 of accounts receivable, and wrate off $60,000 af accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible. Required: 1. Calculate Hungryman's preadjustment balance in accounts receivable on December 31, 2019 1.376,600 2. Calculate Hungryman's preadjustment balance in allowance for doubtful accounts on December 31, 2019. $10,000 Feedback Check My Work 1 & 2. Using T-accounts, start with the balance at the beginning of the year and make the necessary dabits andar credits for the transactions that occurred during the year. 3. Prepare the necessary adjusting entry for 2019. Bad Debt Expense 50,000 Allowance for Doubtful Accounts Record adjusting entry for bad debt expense estimate Feedback Check My Work 3. The aging method attempts to estimate the ending balance in the Allowance for Doubo Accounts Feedback Check My Work Partially correct

Answer 1

Open ing Balane of Account Reaivabes P1281600 Add dt Sales $18100 000 w Collerfions 445000) 1436600 espwitlen aff C$ 6000 0) F13t6600 Opening Balone in allooane Account $ 50000 ersLit (60000) Debit lug!written off $10000 Debit Exuss has bean written oft without prouisi m $10000 t S 52000. Baol debt Eupenses 3 G2000 Baol dlobt Oxpenses $62000 $62000 Allo wanus for drubtful actons