Question

2. Solomon Shingles uses the aging method to estimate bad debt expense. At the beginning of the year, the company had an accounts receivable balance of $47,600 anda credit balance in the allowance for doubtful accounts of S 9,960. During the year Solomon had credit sales of $1,248,600, and collected accounts receivable in the amount of $1,205,400. $21,200 of accounts receivable were determined to be uncollectible and written off. The company had the following analysis of accounts receivable at the end of the year: un Default Current 1-15 days past due 16-45 days past due 46-90 days past due Over 90 days past due $40,800 10,600 6,200 7,200 1% 2% 8% 15% 30% 4 $69,600 Windsor has a December 31 yearend Required: Answer the questions below on the following page: 1. Prepare the journal for the write-off of the accounts receivable of $21,200 2. Calculate the desired ending balance of the allowance for doubtful accounts at the end of the year 3. Prepare the journal entry to record bad debt expense at year end

Answer 1

1) Journal entry

Date	account and explanation	debit	credit
	Allowance for doubtful accounts	21200
	Account receivable		21200
	(To record write off)

2) Estimated ending balance of allowance for doubtful accounts

Days	Amount	% Uncollectible	Uncollectible amount
Current	40800	1%	408
1-15 days	10600	2%	212
16-45 days	6200	8%	496
46-90 days	7200	15%	1080
Over 90	4800	30%	1440
Total			3636

Estimated allowance for doubtful accounts = $3636

3) Bad debt expense = 3636-( 9960-21200) = $14876

Date	account and explanation	debit	credit
	Bad debt expense	14876
	Allowance for doubtful account		14876
	(To record bad debt expense)