Question

method for it's uncollech ble accounts recent Duding the multiplying 2% times the amount clairs clothing corporation grands customers a monthly bad debt of credit sals for the north, Ai the fiscal year end of sec. 31, an aging of accounts for unesiketi be accounts' adjusted accordingly, pecetvelte schedule is prepared and the allowance At the end of 2020, accounts receivable were 4592,000 and the all allowance account had a credit balance of 56,000. Account Recewable Activity for 2001 was as follows? Begiming Balance 592,000 Credit Sales 2710,000 Collections (2,573,000) Write offs (48,000) Ending Balance $68,000 Aging Summary of Accounts 0-60 days $415,000 4% Uncollectible 61-90 days 98,000 12% 91-120 days 58,000 28% > 120 days 110.000 39% Total 681,000 percent

Answer 1

Credit Debit $ 48,000 Accounts tittle Allowance for doubtful accounts Accounts Receivables To write off uncollectable accounts receivables $ 48,000 Accounts receivables Estimated percent uncollectable Bad debts expense 0-60 Days 61-90 days 91-120 days Over 120 days Total $ 415,000 $ 98,000 $ 58,000 $ 110,000 $681,000 4.00% 12.00% 28.00% 39.00% S 16,600 S 11,760 S 16,240S 42,900 S 87,500 working note-1 Allowance for uncollectable accounts, Beginning balance Less: Accounts receivables write off Allowance for uncollectable accounts, Ending balance before adjustment $ 56,000 $ (48,000) $ 8,000 In case of percentage on ageing accounts receivable "Bad debts expense" is amount to be adjusted to closing balance of "allowance for doubtful accounts" Allowance for bad debts required $ 87,500 A Balance in allowance for bad debts before adjustment $ 8,000 B Balance to be created $ 79,500 A-B 1 Credit General journal Bad debts expense Allowance for doubtful accounts Debit $ 79,500 $ 79,500 2 Bad debts expense for 2021 is $ 79,500 Allowance for doubtful accounts Debit Balance Credit $ 56,000 Date Description Beginning balance Accounts receivables Bad debts expense $ 48,000 $ 8.000 87,500 $ 79,500 $ 2021 3 Balance sheet (Partial) Current assets Accounts receivables (Net) $593,500 Accounts receivables ending balance Less: Allowance for doubtful accounts Net Accounts receivables 2021 $ 681,000 $ (87,500) $593,500