P9.4 (LO 2), AP Writing Rigney Inc. uses the allowance method to estimate uncollectibles. The company produced the following aging of the accounts receivable at year-end. Worksheet Home Insert Page Layout Formulas Data Review View P18 fx В C D F Number of Days Outstanding Total Accounts receivable 200,000 % uncollectible Estimated bad debts 0-30 77,000 1% 31-60 46,000 4% 61-90 39,000 5% 91–120 Over 120 23,000 8% 15,000 20% Instructions a. Calculate the total estimated uncollectibles based on the above information. a. Tot. est. bad debts $9,400 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 $8,000 debit. c. Of the above accounts, $5,00o is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry
P9.4 (LO 2), AP Writing Rigney Inc. uses the allowance method to estimate uncollectibles. The company produced the following aging of the accounts receivable at year-end. Worksheet Home Insert Page Layout Formulas Data Review View P18 fx В C D F Number of Days Outstanding Total Accounts receivable 200,000 % uncollectible Estimated bad debts 0-30 77,000 1% 31-60 46,000 4% 61-90 39,000 5% 91–120 Over 120 23,000 8% 15,000 20% Instructions a. Calculate the total estimated uncollectibles based on the above information. a. Tot. est. bad debts $9,400 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 $8,000 debit. c. Of the above accounts, $5,00o is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:P9.4 (LO 2), AP Writing Rigney Inc. uses the allowance method to estimate uncollectibles. The company produced the following aging of the accounts
receivable at year-end.
Worksheet
Home
Insert
Page Layout
Formulas
Data
Review
View
P18
fx
A
B
D
E
F
G
1
Number of Days Outstanding
2
Total
0-30
77,000
1%
31-60
61-90
91-120 Over 120
23,000
8%
3
4 Accounts receivable 200,000
% uncollectible
6 Estimated bad debts
46,000
4%
39,000
5%
15,000
20%
7
Instructions
a. Calculate the total estimated uncollectibles based on the above information.
a. Tot. est. bad debts $9,400
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 $8,000 debit.
c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.
d. The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry
or entries necessary to restore the account and record the cash collection.
e. Comment on how your answers to (a)-(d) would change if Rigney Inc. used 4% of total accounts receivable, rather than aging the accounts receivable.
What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable?
Journalize entries to record transactions related to bad debts.
Expert Solution
Step 1
I am answering the first 3 sub-parts of the question as per bartleby guidelines. Please re-submit the remaining sub-parts separately to receive the answers.
Journal is the book of original entry in which all the financial transactions of the business are recorded initially.
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