Question

A summary of Klugman Company's December 31, 2021, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:

Age Group	Amount				%
0–60 days	$	64,000			0.5
61–90 days		24,000			1.0
91–120 days		3,400			10.0
Over 120 days		1,100			50.0

The allowance for uncollectible accounts had a balance of $1,440 on January 1, 2021. During the year, bad debts of $790 were written off.

Required:
Prepare all journal entries for 2021 with respect to bad debts and the allowance for uncollectible accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Journal Entries:

Account title	Debit	Credit
Allowance for uncollectible accounts	790
Accounts Receivables		790
(To bad debts written off)
Bad debt expenses	800	.
Allowance for uncollectible accounts	.	800
(To recored allowance for the year)

Working:

Estimate Balance of Allowance of uncollectible Accounts
Age group	Account Receivables	% Uncollectible	$ Uncollectible
0-60 days	64000	0.5%	320
61-90 days	24000	1%	240
91-120 days	3400	10%	340
Over 120 days	1100	50%	550
Total			1450

Allowance for bad debts
Beginning	1440
Less: Written off	-790
Balance after written off	650
Required closing balance	1450
Bad debt expense for the year (1450-650)	800