Question

The Accounts Receivable balance for Lakeside Company at December 31, 2017, was $22,000. During 2018, Lakeside earned revenue of $460,000 on account and collected $321,000 on account. Lakeside wrote off $6,100 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 4% of accounts receivable. Read the requirements Requirement 1. Assume Lakeside had an unadjusted $2.300 credit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lakeside's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Dec. 31 Requirements Requirem 31, 2018 percent-o entry table Assume Lakeside had an unadjusted $2,300 credit balance in Allowance for Bad ember Debts at December 31, 2018. Journalize Lakeside's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method. ournal 2. Assume Lakeside had an unadjusted $1,800 debit balance in Allowance for Bad Debts at December 31, 2018. Journalize Lakeside's December 31, 2018, adjustment to record bad debts expense using the percent-of-receivables method Date Dec Print Done Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

1

Computation of adjusted balance of accounts receivable at the end of 2018 as follows

Amount-$

Balance of Accounts Receivable at Dec 31 2017

22000

Add Revenue earned during 2018

460000

Total Receivables

482000

Less Collections on account during 2018

321000

Less Receivable W/O as Un Collectible during 2018

6100

Adjusted balance of accounts Receivable at 31 Dec 2018

154900

Computation of the amount of estimated un collectible accounts receivable by multiplying the adjusted balance of Accounts Receivable at Dec31 2018 by the estimated percentage of uncollectible accounts receivable

Estimated un collectible accounts receivable

154900*4%

$6,196

The amount of estimated un collectible accounts receivable for 2018 is $6196

The amount of estimated un collectible accounts receivable for the yr 2018 is $6196.However the allowance for bad debts accounts

has already unadjusted credit balance of $2300 .Therefore ($6196-$2300) or $3896 should be recorded as bad debt expenses for the yr

2018

The Journal Entry to record the bad debt expense for 2018

Date

Account Title

Debit-$

Credit-$

31-Dec

Bad Debt Expense

3896

Allowance for Bad Debts

3896

to record bad debt expense for the year

2

The amount of estimated un-collectible accounts receivable for the yr 2018 is$6196.However the allowance for

bad debts account has an un-adjusted debit balance of $1800.Therefore ($6196+$1800) or $7996 should be recorded as

bad debt expenses for the yr 2018

The Journal Entry to record the bad debt expense for 2018

Date

Account Title

Debit-$

Credit-$

31-Dec

Bad Debt Expense

$7,996

Allowance for Bad Debts

$7,996

to record bad debt expense for the year