Question

The following summarizes the aging of accounts receivable for Johnston Supplies, Inc. as of July 31,...

The following summarizes the aging of accounts receivable for Johnston Supplies, Inc. as of July 31, 2019:


Number of Days Unpaid Total Accounts Receivable Historical % Uncollectible  
Not yet due $ 126,500 2 %
1-30 days past due 89,200 12 %
31-60 days past due 53,600 18 %
Over 60 days past due 31,800 35 %

Required:

  1. The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $28,947 on July 31, 2019. Prepare the required adjusting entry to record Bad Debt Expense for the year.
  2. Johnston Supplies, Inc. writes off $3,081 of uncollectible accounts on August 15, 2019. Prepare the required adjusting entry to record the write-off.
  3. Use a T-account to determine the account balance in the Allowance for Doubtful Accounts on August 15, 2019.

Homework Answers

Answer #1
total Estimated
Account % bad
Number of days Unpaid receivable uncollectible debts
Not yet due 126,500 2% 2530
1--30 days past due 89,200 12% 10704
31-60 days past due 53600 18% 9648
over 60 days past due 31,800 35% 11130
total 34012
Journal Entry
Date General journal Debit Credit
7/31/2016 Bad debts expense 5065
Allowance for Doubtful accounts 5065
8/15/2016 Allowance for Doubtful accounts 3,081
Account receivable 3,081
Allowance for Doubtful accounts
28,947 opening
5,065 31 july adjustment
15-Aug 3,081
30,931 aug 15 bal
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