Company sells products to its cusotmers on credit basis, adjusting entry for bad debt expense is recorded at Dec 31.  The 2017 bs disclosed: Current assets: receivables, net of allowance for uncollectible accounts of $50,000  $532,000.  During 2018, credit sales were $1,850,000, cash collections from customers were $1,930,000, and $59,000 in accounts receivable were written off.  In addition, $5,000 was collected from a customer whose account was written off in 2017.  An again of accounts receivable at Dec 31, 2018 reveals the following:  Age group      % of year end receivables in group    % uncollible       0-60 days                           65%                                       4% 61-90 days                           15%                                      10% 91-120 days                         15%                                       30% Over 120 days                      5%                                          50% #1.  Prepare summary journal entries to account for the 2018 write off and the collection of the receivable previously written off. #2.  Prepare the year end adjsuting entry for bad debts accoridng to each of the following situations:      a.  Bad debt expense is estimated to be 3% of credit sales for the year.      b.  Bad debt expense is estimated by computing net realizable value of the receivables.  The allowance for uncollectible accounts is estimated to be 10% of the year end balance in accounts receivable. #3.  For situations (a) -(b) in requirement 2 above, what would be the net amount of accounts receivable in the 2018 balance sheet? Could you please show me how to do this?  Thanks.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Company sells products to its cusotmers on credit basis, adjusting entry for bad debt expense is recorded at Dec 31.  The 2017 bs disclosed: Current assets: receivables, net of allowance for uncollectible accounts of $50,000  $532,000.  During 2018, credit sales were $1,850,000, cash collections from customers were $1,930,000, and $59,000 in accounts receivable were written off.  In addition, $5,000 was collected from a customer whose account was written off in 2017.  An again of accounts receivable at Dec 31, 2018 reveals the following: 

Age group      % of year end receivables in group    % uncollible    

  0-60 days                           65%                                       4%

61-90 days                           15%                                      10%

91-120 days                         15%                                       30%

Over 120 days                      5%                                          50%

#1.  Prepare summary journal entries to account for the 2018 write off and the collection of the receivable previously written off.

#2.  Prepare the year end adjsuting entry for bad debts accoridng to each of the following situations:

     a.  Bad debt expense is estimated to be 3% of credit sales for the year.

     b.  Bad debt expense is estimated by computing net realizable value of the receivables.  The allowance for uncollectible accounts is estimated to be 10% of the year end balance in accounts receivable.

#3.  For situations (a) -(b) in requirement 2 above, what would be the net amount of accounts receivable in the 2018 balance sheet?

Could you please show me how to do this?  Thanks.                  

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