Question

# A summary of Klugman Company's December 31, 2018, accounts receivable aging schedule is presented below along...

A summary of Klugman Company's December 31, 2018, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:

 Age Group Amount % 0–60 days \$ 57,000 .5 61–90 days 20,500 1.0 91–120 days 2,700 10.0 Over 120 days 1,100 50.0

The allowance for uncollectible accounts had a balance of \$1,370 on January 1, 2018. During the year, bad debts of \$720 were written off.

Required:
Prepare all journal entries for 2018 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.)

Solution:

 Computation of estimated uncollectibles - Klugman Company Age-group Account receivables balance Estimated percentage uncollectible Estimated Uncollectible 0-60 days \$57,000.00 0.5% \$285.00 61-90 days \$20,500.00 1% \$205.00 91-120 days \$2,700.00 10% \$270.00 Over 120 days \$1,100.00 50% \$550.00 \$81,300.00 \$1,310.00
 Journal Entries - Klugman Company Event Particulars Debit Credit 1 Allowance for uncollectible accounts Dr \$720.00 To Accounts Receivables \$720.00 (To bad debts written off) 2 Bad debts Expense Dr (\$1,310 + \$720 - \$1,370) \$660.00 To Allowance for uncollectible accounts \$660.00 (Being provision for uncollectible accounts recorded)