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

Estimated allowance for doubtful accounts = (126500*2%+89200*12%+53600*18%+31800*35%) = \$34012

Adjusting entry

 Date account and expalnation debit credit Bad debt expense (34012-28947) 5065 Allowance for doubtful accounts 5065 (To record adjusting entry)

2) Journal entry

 Date account and explanation debit credit Aug 15 Allowance for doubtful accounts 3081 Account receivable 3081 (To record write off)

T-account

 Account receivable 3081 Beg Bal 34012 End Bal 30931

Allowance for doubtful accounts on aug 31,2019 = \$30931 credit

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