Question

6. At the end of the year, a company has the following accounts receivable and estimates of uncollectible accounts: (10) 1. Accounts not yet due = $70,000; estimated uncollectible = 4%. 2. Accounts 1-30 days past due = $30,000; estimated uncollectible = 15%. 3. Accounts more than 30 days past due = $5,000; estimated uncollectible = 40%. Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $1,200 (debit).

Answer 1

6 th question:

first let us know the current year allowance required:

accounts not yet due (70,000*4%)	$2,800
accounts 1-30 days past due (30,000*15%)	4,500
accounts more than 30 days past due (5,000*40%)	2,000
existing debit balance	1,200
total bad debt expense to be recorded	$10,500

the following will be the journal entry to be recorded:

sno	accounts	debit	credit
1	Bad debt expense a/c	10,500
	.........To allowance for uncollectible accounts a/c		10,500

181.

The following will be journal entries:

sno	accounts	debit	credit
a	Cash a/c	$20,000
	.........To common stock a/c		20,000
b.	No entry
c	Prepaid rent a/c	$3,000
	........To cash a/c		$3,000
	(amount =$500 per month * 6 months)
d.	Plant and equipment a/c	$5,400
	............To cash a/c	.	5,400
e.	supplies a/c	$1,800
	..........To accounts payable a/c		1,800
f	cash a/c	7,800
	..........To service revenue a/c		7,800
g	salaries expense a/c	5,200
	..........To cash a/c		5,200
h.	accounts payable a/c	1,800
	..........To cash a/c		1,800
i.	advertising expense a/c	$800
...	............To cash a/c		800
j	utilities expense a/c	1,300
	........To cash a/c		1,300