Question

Unit Assesment 7- prepare a receivables aging

This assessment addresses the following course objective(s):

Record various business transactions in accordance with generally accepted accounting principles.

In this assignment, we will estimate the amount for the allowance account by analyzing and aging Accounts Receivable.

Wright Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis. Total Days Past Due 01-30 411,000 105000 29 1.109 000 Accounts receivable Percent uncollectible 31-60 515000 5% 61-90 over 90 33,000 45000 79 10% a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using the aging of accounts receivable method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,100 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit. Percent Accounts Receivable $ Uncollectible (%) Not due: 1 to 30: 31 to 60 61 to 90: Over 90: Estimated balance of allowance for uncollectibles credit debitor credit? Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,100 credit. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit. No Date General Journal Debit Credit

Answer 1

a)	Accounts Recievable	$	Percent Uncollectible	%
	Not due	411000	x	1%	=	$   4,110.00
	1 to 30:	105000	x	2%	=	$   2,100.00
	31 to 60:	515000	x	5%	=	$ 25,750.00
	61 to 90:	33000	x	7%	=	$   2,310.00
	over 90:	45000	x	10%	=	$   4,500.00
	Estimated balance of allowance for uncollectibles					$ 38,770.00	Credit

NO	Date	General journal	Debit	Credit
1	31-Dec	Uncollectible allowance A/c - Dr'	$ 38,770.00
		Allowance for doubtful debts	$   5,100.00
		ToAccoutns Recievables		$ 43,870.00
2	31-Dec	Uncollectible allowance A/c - Dr'	$ 38,770.00
		To Allowance for doubtful debts		$   1,600.00
		To Accounts Recievables		$ 37,170.00