Question

At the end of the year, a company has the following accounts receivable and estimates of...

At the end of the year, a company has the following accounts receivable and estimates of uncollectible accounts: Accounts not yet due = $89,000; estimated uncollectible = 2%. Accounts 1-30 days past due = $29,000; estimated uncollectible = 25%. Accounts more than 30 days past due = $8,000; estimated uncollectible = 55%. Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $810 (credit). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Homework Answers

Answer #1
  • Adjustment entry would be:

Accounts title

Debit

Credit

Bad Debt Expense [or Uncollectible account expense]

$12,620

   Allowance for Uncollectible account

$12,620

  • Working

Number of Days

Receivables

Past Due

Amount

% uncollectible

Uncollectible amount

Note due

$89,000

2%

$1,780

0-30

$29,000

25%

$7,250

More than 30 days

$8,000

55%

$4,400

Adjusted balance required of Allowance for Doubtful Account (A)

$13,430

Unadjusted balance in the Allowance account (B)

$810

Uncollectible account expense for Year 2: (A - B)

$12,620

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