(b)-(d) (b) (c) (d) (b) Prepare the year-end adjusting journal entry to record the Bad Debt Expense using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $8,200 debit. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (c) Of the above accounts, $5,300 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. No Account Titles and Explanation (d) The company collects $5,300 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entries necessary to restore the account and record the cash collection. (To reverse write-off.) (To record collection of write off.) Debit Credit
(b)-(d) (b) (c) (d) (b) Prepare the year-end adjusting journal entry to record the Bad Debt Expense using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $8,200 debit. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (c) Of the above accounts, $5,300 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. No Account Titles and Explanation (d) The company collects $5,300 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entries necessary to restore the account and record the cash collection. (To reverse write-off.) (To record collection of write off.) Debit Credit
College Accounting (Book Only): A Career Approach
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ChapterB: Bad Debts
Section: Chapter Questions
Problem 1P
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
100%
Transcribed Image Text:Blossom Inc. uses the allowance method to estimate uncollectibles. The company produced the following aging of the accounts receivable at year-end.
(a)
Calculate the total estimated uncollectibles based on the below information.
Accounts receivable
% uncollectible
Estimated Bad debts
$
Total
$216,800
0-30
$81,000
2%
31-60
$50,000
5%
Number of Days Outstanding
$
61-90
$42,100
6%
$
91-120
$25,700
9%
Over 120
$18,000
21%
Transcribed Image Text:(b)-(d)
(b)
(c)
(d)
(b)
Prepare the year-end adjusting journal entry to record the Bad Debt Expense using the aged uncollectible accounts
receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $8,200 debit.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(c)
Of the above accounts, $5,300 is determined to be specifically uncollectible. Prepare the journal entry to write off the
uncollectible account.
No Account Titles and Explanation
(d)
The company collects $5,300 subsequently on a specific account that had previously been determined to be
uncollectible in (c). Prepare the journal entries necessary to restore the account and record the cash collection.
(To reverse write-off.)
(To record collection of write off.)
Debit
Credit
Expert Solution
Step 1 Introduction
Journal Entry :— It is an act of recording transaction in books of account when transaction occurred.
General Rule :—
- Debit the receiver, credit the giver.
- Debit what comes in, credit what goes out.
- Debit all expenses & losses, credit all incomes & gains.
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