Not Yet Due Due between Due between Due between Total 31-60 over than 61 1-30 days days days Account Receivable Balance $300,000 $100,000 $70,000 $30,000 $500,000 Estimated of Uncollectible Rate 5% 10% 20% 40% Allowance of bad debt ?? ?? ?? ?? ?? Additional Information: 1- Beginning Balance (Unadjusted Balance) of Account Receivable was $22,000 credit. 2- Written off receivable during the year of 2023 was $1,000. Required: 1- Prepare the entry of recording bad debt expense at end of 2023. 2- Prepare the entry of written off receivables by $1,000. 3- If the receivable of $1,000 that was written off previously was recovered, prepare the entries of recovering written off receivables.
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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