Question

ournalize entries to record ransactions related to bad P8-3A Presented below is an aging schedule for Sycamore Company ebts. LO 2, 3) Home Insert Worksheet.xls Review View Page Layout Formules Data P18 A B С D E F G 1 2 3 Number of Days Past Due Not Yet Due 61-90 Over 90 4 1-30 $12,000 31-60 $16,000 5 Customer Anders Blake Cyrs De Jong Others 6 Total $ 28,000 40,000 57,000 34,000 132,000 $291,000 $ 40,000 16,000 6,000 $35,000 7 8 96,000 $152,000 9 16,000 $34,000 $34,000 6,000 $40,000 14,000 $30,000 $35,000 10 Estimated percentage uncollectible Total estimated bad debts 2% 6% 13% 25% 60% 11 $ 41,750 $ 3,040 $ 2,040 $ 3,900 $ 8,750 $24,000 12 Bad debt expense 532,730 At December 31, 2014, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $9,000. Instructions (a) Journalize and post the adjusting entry for bad debts at December 31, 2014. (b) Journalize and post to the allowance account the following events and transactions in the year 2015. (1) On March 31, a $1,000 customer balance originating in 2014 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. Problems: Set A 397 (c) Journalize the adjusting entry for bad debts on December 31, 2015, 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. (c) Bad debt expense $32,400

Answer 1

(a)

Unadjusted balance in allowance for doubtful accounts = $9,000

Ending balance in allowance for doubtful accounts = $41,730

Bad debt expense = Ending balance in allowance for doubtful accounts - Unadjusted balance in allowance for doubtful accounts

= 41,730-9,000

= $32,730

Date	General Journal	Debit	Credit
December 31, 2014	Bad debt expense	32,730
	Allowance for doubtful accounts		32,730
	( To record bad debts expense)

Allowance for doubtful account
		Beg. Bal	9,000
		Dec. 31	32,730
		End. Bal.	41,730

(b)

Date	General Journal	Debit	Credit
March 31, 2015	Allowance for doubtful accounts	1,000
	Accounts receivable		1,000
	( To record write off accounts receivable)
May 31	Accounts receivable	1,000
	Allowance for doubtful accounts		1,000
	( To record reinstating of accounts receivable)
May 31	Cash	1,000
	Accounts rececivable		1,000
	( To record cash received from accounts receivable)

(c)

Allowance for doubtful account
March 31	1,000	Beg. Bal	41,730
		May 31	1,000
		End. Bal.	41,730

Kindly comment if you need further assistance. Thanks‼!