Question

Problem 8-3A Presented below is an aging schedule for Sage Hill Inc.. Customer Total Not Yet Due Number of Days Past Due 1–30 31–60 61–90 Over 90 Aneesh $ 25,300 $ 9,900 $15,400 Bird 30,300 $ 30,300 Cope 48,600 4,600 4,800 $39,200 DeSpears 40,300 $40,300 Others 125,800 75,000 36,600 14,200    $270,300 $109,900 $51,300 $29,600 $39,200 $40,300 Estimated percentage uncollectible 3% 7% 13% 22% 64% Total estimated bad debts $ 45,152 $ 3,297 $3,591 $3,848 $ 8,624 $25,792 At December 31, 2016, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $8,000.

Journalize the adjusting entry for bad debts at December 31, 2016. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

61-90 Over 90 1-30 $9,900 31-60 $15,400 Total Not Yet Due $25,300 $30,300 $30,300 $48,600 $4,600 $40,300 $1,25,800 $75,000 $2,70,300 $1,09,900 $4,800 $39,200 Customer Aneesh Bird Cope DeSpears Others Total (A) Estimated percentage uncollectible (B) Total estimated bad debts (A) x (B) $40,300 $36,600 $51,300 $14,200 $29,600 $39,200 $40,300 3% 7% 13% 22% 64% $45,152 $3,297 $3,591 $3,848 $8,624 $25,792 Desired balance in Allowance for doubtful account on Dec 31, 2016 Less: Balance before adjusting entry Bad Debt entry to be passed $45,152 -$8,000 $37,152 Adjusting Entry Date Dec 31, 2016 Credit Debit $37,152 Account Title Bad Debt Expense Allowance for Doubtful Accounts (To record bad debt expense) $37,152