Question

Part Six: Problem. On March 31, 2019, Merle Company had an unadjusted debit balance of $12,350 in its allowance for uncollectible accounts and a $587,400 debit balance in its accounts receivable account. The Company reported net credit sales of $4,500,000 during the first quarter. An analysis of Merle's trade accounts receivable at that date revealed the following: Days Past Due Amount Estimated uncollectible Current S124,000 3% 1-30 days 74.500 7% 31-60 days67,200 12% 61-90 days 45,700 30% Over 90 days 276,000 45% Total $587,400 What amount should Merle report as Allowance for Doubtful Accounts on its March 31, 2019, balance sheet? Prepare the required journal entry at March 31, 2019 to record the uncollectible accounts expense. Date Accounts Title and Explanation Ref. Debit Credit During 2019 after making the above journal entry, Merle Company wrote off $30,000 in receivables and recovered $14,700 that had been written off. Prepare the required journal entries. Omit explanations. Date Accounts Title and Explanation Ref. Debit Credit

Answer 1

ANSWER = 1
	CALCULATION OF ALLOWANCE FOR DOUBTFULL ACCOUNT
	Age Group	Amount	% Estimate uncolletable	Expense Value
	Current	$               1,24,000	3.00%	$                3,720
	1-30 Days	$                  74,500	7.00%	$                5,215
	31-60 Days	$                  67,200	12.00%	$                8,064
	61-90 Days	$                  45,700	30.00%	$              13,710
	Over 90 Days	$               2,76,000	45.00%	$          1,24,200
		$               5,87,400		$          1,54,909
	Answer =	$               1,54,909
ANSWER = 2
	Opening balance of allowance for doubtfull Accounts =	$                  12,350
	Add: Allowancefor doubtfull account of the year =	$               1,54,909
	Bad Debt expenses of the year	$               1,67,259
Journal Entries
Date	Account Title and explanation	Debit	Credit
	Bad Debt Expenses	$               1,67,259
Mar 31, 2019	To Allowance for Doubtful Debts		$                 1,67,259
	(To Record the allowance for Doubtfull Debts for the year End)
ANSWER = 3
Journal Entries
Date	Account Title and explanation	Debit	Credit
	Allowance for Doutfull Debts	$                  30,000
2019	To Account Receivable		$                     30,000
	(To Record the write off the customer account)
2019	Account Receivable	$                  14,700
	Allowance for Doutfull Debts		$                     14,700
	(Create the account receivable again for recover)
2019	Cash	$                  14,700
	Account Receivable		$                     14,700
	(Collect the cash from customer)