Question

Practice Problem 01 a-c

Presented below is an aging schedule for Sheridan Company.

						Number of Days Past Due
Customer		Total		Not Yet Due		1–30		31–60		61–90		Over 90
Anders		$ 21,500				$10,500		$11,000
Blake		40,900		$ 40,900
Coulson		58,300		16,500		6,500				$35,300
Deleon		34,500										$34,500
Others		132,600		95,200		16,200		14,600				6,600
		$287,800		$152,600		$33,200		$25,600		$35,300		$41,100
Estimated Percentage Uncollectible				3%		6%		13%		25%		41%
Total Estimated Bad Debts		$ 35,574		$ 4,578		$ 1,992		$ 3,328		$ 8,825		$16,851

At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $11,000.

Journalize and post the adjusting entry for bad debts at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles	Debit	Credit
Mar. 31, 2020May 31, 2020Dec. 31, 2020Mar. 31, 2021May 31, 2021Dec. 31, 2021

Bad Debt Expense
12/31/20 Adj.5/31/20 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.		12/31/19 Adj.5/31/19 Adj.3/31/19 Adj.12/31/20 Adj.5/31/203/31/2012/31/19 Bal.5/31/19 Bal.3/31/19 Bal.12/31/20 Bal.
12/31/20 Adj.5/31/20 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.		12/31/19 Adj.5/31/19 Adj.3/31/19 Adj.12/31/20 Adj.5/31/203/31/2012/31/19 Bal.5/31/19 Bal.3/31/19 Bal.12/31/20 Bal.
Allowance for Doubtful Accounts
12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.		12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.
12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.		12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.
12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.		12/31/20 Adj.5/31/21 Adj.3/31/20 Adj.12/31/21 Adj.5/31/213/31/2112/31/20 Bal.5/31/20 Bal.3/31/20 Bal.12/31/21 Bal.

Journalize and post to the allowance account the following events and transactions in the year 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1)		On March 31, a $1,000 customer balance originating in 2020 is judged uncollectible.
(2)		On May 31, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 31.

Answer 1

Answer a.

Estimated Uncollectible = $35,574

Bad Debt Expense = Estimated Uncollectible - Unadjusted Credit Balance of Allowance for Doubtful Accounts
Bad Debt Expense = $35,574 - $11,000
Bad Debt Expense = $24,574

Answer b.