Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings. $ 300,000 Not yet due b. a. 1-30 days past due 31-60 days past due d. 126,000 48,000 9,000 18,000 c. 61-90 days past due Over 90 days past due e. Total $501,000 On the basis of past experience, the company estimated the percentages probably uncollectible for the five age groups to be as follows: Group a, 1 percent; Group b, 3 percent; Group c, 10 percent; Group d, 20 percent; and Group e, 50 percent. The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit balance of $7,080. Required: a. Compute the estimated amount of uncollectible accounts based on the above classification by age groups. b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount. c. Assume that on January 10 of the following year, Putnam & Putnam learned that an account receivable that had originated on September 1 in the amount of $5,160 was worthless because of the bankruptcy of the client, Safeland Co. Prepare the journal entry required on January 10 to write off this account.
Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings. $ 300,000 Not yet due b. a. 1-30 days past due 31-60 days past due d. 126,000 48,000 9,000 18,000 c. 61-90 days past due Over 90 days past due e. Total $501,000 On the basis of past experience, the company estimated the percentages probably uncollectible for the five age groups to be as follows: Group a, 1 percent; Group b, 3 percent; Group c, 10 percent; Group d, 20 percent; and Group e, 50 percent. The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit balance of $7,080. Required: a. Compute the estimated amount of uncollectible accounts based on the above classification by age groups. b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount. c. Assume that on January 10 of the following year, Putnam & Putnam learned that an account receivable that had originated on September 1 in the amount of $5,160 was worthless because of the bankruptcy of the client, Safeland Co. Prepare the journal entry required on January 10 to write off this account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ACCT 102 - Subparts A,B,C.
Transcribed Image Text:Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of
the accounts receivable produced the following five groupings.
Not yet due
1-30 days past due
31-60 days past due
d.
$ 300,000
126,000
48,000
9,000
18,000
$501,000
b.
C.
61-90 days past due
Over 90 days past due
Total
e.
On the basis of past experience, the company estimated the percentages probably uncollectible for the five age groups to be as
follows: Group a, 1 percent; Group b, 3 percent; Group c, 10 percent; Group d, 20 percent; and Group e, 50 percent.
The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit balance of $7,080.
Required:
a. Compute the estimated amount of uncollectible accounts based on the above classification by age groups.
b. Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount.
c. Assume that on January 10 of the following year, Putnam & Putnam learned that an account receivable that had originated on
September 1 in the amount of $5,160 was worthless because of the bankruptcy of the client, Safeland Co. Prepare the journal entry
required on January 10 to write off this account.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Prepare the adjusting entry needed to bring the Allowance for Doubtful Accounts to the proper amount. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education