Hiroole Corporation prepares an aging schedule for its accounts receivable at the end of each month and records credit losses monthly. The following selected information is from Hiroole's partial aging schedule at the end of August: Number of Days Outstanding 0-30 days 31-60 days 61-90 days. Over 90 days Total Accounts Receivable $264,000 82,000 44,000 19,000 $409,000 Estimated Percentage Uncollectible 1% 2% 9% 14% The unadjusted balance in Allowance for Expected Credit Losses is a debit of $4,300.

Hiroole Corporation prepares an aging schedule for its accounts receivable at the end of each month and records credit losses monthly. The following selected information is from Hiroole's partial aging schedule at the end of August: Number of Days Outstanding 0-30 days 31-60 days 61-90 days. Over 90 days Total Accounts Receivable $264,000 82,000 44,000 19,000 $409,000 Estimated Percentage Uncollectible 1% 2% 9% 14% The unadjusted balance in Allowance for Expected Credit Losses is a debit of $4,300.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.

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Hiroole Corporation prepares an aging schedule for its accounts receivable at the end of each month and records credit losses
monthly. The following selected information is from Hiroole's partial aging schedule at the end of August:
Number of Days
Outstanding
0-30 days
31-60 days
61-90 days
Over 90 days
Total
Accounts Receivable
$264,000
82,000
44,000
19,000
$409,000
Estimated Percentage
Uncollectible
1%
2%
9%
14%
The unadjusted balance in Allowance for Expected Credit Losses is a debit of $4,300.

Prepare the adjusting journal entry to record the credit losses for the month using the information determined in part (a). (List
debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Debit
the bad debts expense would be $
Credit
Would your journal entry be different if the unadjusted balance in Allowance for Expected Credit Losses were a credit of $4,300?

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