Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019.Part AAccounts receivable...........................................$2,800,000Allowance for uncollectible accounts...................$88,800 (credit) The company completed the following transactions during 2019.April 20-- Wrote off the balance of $1,000 from Shari Wickham’s account as uncollectible. November 27- Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier. December 31st-Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible.Made the closing entry for the uncollectible expense account. Requirements:Prepare journal entries for each transaction (No narrations required)Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.Prepare the balance sheet extract as at Dec 31, 2019, to show the net realizable value for the Accounts Receivable.

Bad debt expense is recognized for the loss of accounts receivable as some of the customers may not…

Answered: Ace Company uses the Aging of…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Related questions

Question

Ace Company uses the Aging of receivables method to account for uncollectible accounts. The company had the following balances on January 01, 2019.

Part A

Accounts receivable...........................................$2,800,000

Allowance for uncollectible accounts...................$88,800 (credit)

The company completed the following transactions during 2019.

April 20^-- Wrote off the balance of $1,000 from Shari Wickham’s account as uncollectible.

November 27^- Re-instated the account of Louis Benn and recorded the collection of $1,500 as payment in full for her account which had been written off earlier.

Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $124,500 of accounts receivable was estimated as uncollectible.
Made the closing entry for the uncollectible expense account.

Requirements:

Prepare journal entries for each transaction (No narrations required)
Prepare the Allowance for Uncollectible and the Accounts Receivable accounts based on the information presented and balance off each account.
Prepare the balance sheet extract as at Dec 31, 2019, to show the net realizable value for the Accounts Receivable.

Expert Solution