Question

QS 7-9 Aging of receivables method LO P3 Net Zero Products, a wholesaler of sustainable raw materials. Prepared the following aging of receivables analysis. Days Past Due Accounts receivable Percent uncollectible Total $115,200 $80,000 1x 1 to 30 $18,000 3x 31 to 60 $ 7,200 5% 61 to 90 $ 4,000 8 Over 90 $ 6,000 11% 1. Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method. 2. Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $1,000 credit Complete this question by entering your answers in the tabs below. ces Reg 1 Reg 2 Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method. Accounts Percent receivable uncollectible (0) Not due 1 to 30 31 to 60 X 61 to 90 X Over 90 Estimated balance of allowance for uncollectibles $ Req2 >

Answer 1

Req 1

	Accounts Receivable(a)	Percent Uncollectiable(b)	Amount Uncollectiable(a*b)
Not due	80000	1%	800
1 to 30	18000	3%	540
31 to 60	7200	5%	360
61 to 90	4600	8%	368
over 90	6000	11%	660
	Total Amount Uncollectiable		2728

Req 2

Date	General Journal	Debit	Credit
31-Dec	Baddebts a/c Dr	2728
	Allowance for Doubtful Accounts a/c Dr	1000
	To Accounts Receivable a/c		3728
	(Being baddebts & allowance for doubtful accounts adjusted to Accounts receivable a/c)
31-Dec	Profit & Loss a/c Dr	3728
	To Baddebts a/c		2728
	To Allowance for Doubtful Accounts a/c		1000
	(Being baddebts & allowance for doubtful accounts transfer to Profit & Loss statement)