Question

Entries for Bad Debt Expense Under the Direct Write-Off and Allowance Methods Seaforth International wrote off the following accounts receivable as uncollectible for the year ending December 31: Customer Amount Kim Abel $24,200 Lee Drake 32,850 Jenny Green 29,900 Mike Lamb 17,900 Total $104,850 ompany prepared the following aging schedule for its accounts receivable on December 31: The Receivables Aging Class (Number Balance Estimated Percent of of Days Past Due) on December Uncollectible Accounts 31 0-30 days $730,000 1% 31-60 days 290,000 2 61-90 days 111,000 15 91-120 days ৪0,000 30 More than 120 days 92,000 60 Total receivables $1,303,000 a. Journalize the write-offs under the direct write-off method. If an amount box does not require an entry, leave it blank, Bad Debt Expense Accounts Receivable Kim Abel Accounts Receivable-Lee Drake Accounts Receivable-Jenny Green Accounts Receivable Mike Lamb O0000

would like to know the correct answers for the boxes with a red x by them.

Answer 1

b)

Account Title	Debit	Credit
Bad Debt Expense	123,250.00
Allowance for Doubtful Accounts		123,250.00

Working Note-

Ageing Clause		Percent	Amount
0-30 Days	730,000.00	1%	7,300.00
31-60 Days	290,000.00	2%	5,800.00
61-90 Days	111,000.00	15%	16,650.00
91-120 Days	80,000.00	30%	24,000.00
More than 120 Days	92,000.00	60%	55,200.00
Total Receivables	1,303,000.00		108,950.00

Unadjusted Debit balance of allowance for doubtful accounts (104,850 - 90,550) = 14,300

Estimated Balance as calculated above = 108,950

Adjustment for the entry = 123,250

c)Lower - 18,400