Question

w During 2015, credit sales were $1,750,000. cash collections from customers $1830.000 and $35.000 in accounts receivable were en of in edition, $3,000 was collected from a customer whose account was written off in 2017 An aging of accounts receivable at December 31, 2018 reveals the following Dercentage of Year End Receivables In Group Percent Uncollectible Age Group Duer 120 days Required: 1. Prepare Summary journal entines to account for the 2018 write-offs and the collection of the receivable previously written of 2. Prepare the year-end acusting entry for bad debts according to each of the following situations b Bad debt expense is estimated to be 3 of credit sales for the ad debt expense is estimated by computing not realizable value of the receivables The allowance for uncollectible accounts is stimated to be 10% of the yoond balance in accounts receivable C. Bad debt expense is estimated by computing not realable value of the receives the allowance for uncollectible accounts is determined by an aging of accounts receivable, ations tal-in requirement 2 above, what would be the not amount of accounts receivable reported in the Fr Sheet balance Complete this question by entering your answers in the tabs below For sac balance sheet rem ent above what would be the net amount of accounts receivable reported

Question #3

Answer 1

Answer to Question no 01
(Journal Enteries to account for the 2018 write off and collection of receiveable previously written off)
Date		Particulars		DR	CR
During 2018		Allowance for doubtful A/c		35000
			To Accounts Receiveable A/c		35000
		(Being amount written off during the year )
		Accounts Receiveable A/c		3000
			To Allowance for doubtful A/c		3000
		( Being entry passed for due of recoverable from from earlier write off)
		Cash/Bank A/c		3000
			To Accounts Receiveable A/c		3000
		Being amount received from earier written off)
Answer to Question no 02
(Journal Enteries for year end adjustment of bad debt )
Date		Particulars		DR	CR
During 2018	(a)	Bad debt Expenses A/c		52500
			To Allowance for doubtful A/c		52500
		( Bad debt expenses recognized as 3 % of Credit sale)
	(b)	Bad debt Expenses A/c		171,500
			To Allowance for doubtful A/c		171500
		( Bad debt expenses recognized as per working note -2 )
	©	Bad debt Expenses A/c		173215
			To Allowance for doubtful A/c		173215
		( Bad debt expenses recognized as per working note -3 )

Answer to Question no 03
For the year ended 2018
Net amount of accounts receiveable to be reported in 2018 Balance sheet in each sitution of Q no 2 as follows
	Situations		Net amount receiveable reported
	( a )		1715000
	( b )		1715000
	( c )		1715000
Working Note
Note 1
Net Realizable value of Accounts Receiveable
There is no data of opening balance of Accounts Receiveable and provision for bad debt in qusestion.
WE can assumed that cash collected is either cash sale or collected for opening accounts receiveable.
So net Ralizeable value of Closing accounts Receivable for the period ended 2018 is
= ( Credit sale - Allownce for written off) = $ 1750000 - $ 35000 = $ 1715000
Note 2
Bad debt Expenses @ 10 % of net Realizable value = $ 1715000* 10% = $ 171500
Note 3
Bad debt Expenses @ percentage of net Realizable value for respective age group
Age Group		Net realizeable value of credit sale	% of year end receiveable in groups	Net realizeable value ofeach group of credit sale	Percent uncollectible	Bad debt Expenses
		1,715,000.00
0-60 days			65%	1,114,750.00	4%	44,590.00
61-90 days			20%	343,000.00	15%	51,450.00
91-120 days			10%	171,500.00	25%	42,875.00
Over 120 days			5%	85,750.00	40%	34,300.00
TOTAL				1,715,000.00		173,215.00