Question

Problem 7-5 Presented below is information related to the Accounts Receivable accounts of Martinez Inc. during the current year 2017 1. An aging schedule of the accounts receivable as of December 31, 2017, is as follows. %to Be Applied after Correction Is Made Age Net Debit Balance Under 60 days 60-90 days 91-120 days $171,300 136,500 39,300 19% 3% 6% $3,800 definitely uncollectible; estimated remainder uncollectible is 25% Over 120 days 22,300 $369,400 The $3,000 write-off of receivables is related to the 91-to-120 day category 2. The Accounts Receivable control account has a debit balance of $369,400 on December 31, 2017 3. Two entries were made in the Bad Debt Expense account during the year: (1) a debit on December 31 for the amount credited to Allowance for Doubtful Accounts, and (2) a credit for $3,000 on November 3, 2017, and a debit to Allowance for Doubtful Accounts because of a bankruptcy 4. Allowance for Doubtful Accounts is as follows for 2017. Allowance for Doubtful Accounts Nov. 3 Uncollectible accounts written off 3,000 Jan. Bginning balance 5% of $369,400 9,400 18,470 Dec. 31 5. A credit balance exists in the Accounts Receivable (60-90 days) of $4,400, which represents an advance on a sales contract. Assuming that the books have not been closed for 2017, make the necessary correcting entries. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) DateAccount Titles and Explanation Debit Credit Dec. 31, 2017 To correct bad debt expense and write off accounts receivable) Dec. 31, 2017 (To reclassify credit balance in accounts receivable) Dec. 31, 2017 Dec. 31, 2017 To correct bad debt expense and write off accounts receivable) Dec. 31, 2017 To reclassify credit balance in accounts receivable) Dec. 31, 2017 To write off uncollectible accounts) Dec. 31, 2017 (To reduce allowance for doubtful account balance)

Answer 1

x Presented below is infomationm celated to the Account Re coivable accounb cf marines ino pak 3l 1 Budget for Doubiful eccount$ 3800 JO ACCOunt Recoiv abl e s 3800 TO coavect bad debt exPen'e 2 5 3000 TO AcCoUnt Recaivable to zeclassity credtit bol ane n ccount ecevable) 3000 KTO are peehccount Recaiv able T0 Advonce on sale con lacc s 4900 accoumts

Date Debi ced し8323 Account Name 4 ec Allocwane for doub ful accounts 20ほ TO Bad Debt ExPenje s 3322 a ccount bal ance.) xPlanation Age Galance Aging (CAE schedule l mount ndes 6o days 31300 9D days ll s 14090ofi36500 t 4400)| 120 days ||$ 36300 (39300-3000)| s 1313 4223 2138 4462S 3% | 690 O Ves 120 d a 13500 (22300-3800)S lot H (r conect Balance) solan ce C G00 12410-3000-3800 -12+43)