Question
On December 31, 2018, Zale Company had an unadjusted debit balance of $1,000 in its allowance...
On December 31, 2018, Zale Company had an unadjusted debit balance of $1,000 in its allowance for uncollectible accounts. An analysis of Zale's trade accounts receivable at that date revealed the following:
|
Age |
Amount |
% Estimated Uncollectible |
|||||||||
|
0-30 days |
$ |
125,000 |
2% |
||||||||
|
31-60 days |
34,000 |
5% |
|||||||||
|
60-90 days |
8,500 |
20% |
|||||||||
|
Over 90 days |
4,700 |
50% |
|||||||||
Required:
a. Determine the amount Zale should report as allowance for uncollectible accounts in its December 31, 2018 balance sheet.
b. Prepare any necessary adjusting entry at December 31, 2018 related to this analysis.
Homework Answers
Answer #1
Solution:-
a. Determine the amount Zale should report as allowance for uncollectible accounts in its December 31, 2018 balance sheet:-
| Allowance for uncollectible accounts in its December 31, 2018 balance sheet | 8,250 |
Explanation:-
| Age | Amount | % Estimated Uncollectible | Amount Estimated Uncollectible |
| 0-30 days | 125,000 | 2% | 2,500 |
| 31-60 days | 34,000 | 5% | 1,700 |
| 60-90 days | 8,500 | 20% | 1,700 |
| Over 90 days | 4,700 | 50% | 2,350 |
| Total | 8,250 | ||
b. Prepare any necessary adjusting entry at December 31, 2018 related to this analysis:-
| Date | Account titles | Debit | Credit |
| December 31, 2018 |
Bad Debt Expense (8,250 + 1,000) |
9,250 | |
|
Allowance for doubtful accounts |
9,250 |
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