The following information was taken from the accounts receivable records of Sarasota Corporation as at December 31, 2020: Outstanding Balance Percentage Estimated to be Uncollectible 0 – 30 days outstanding $160,000 0.5% 31 – 60 days outstanding 66,000 2.5% 61 – 90 days outstanding 40,200 4.0% 91 – 120 days outstanding 20,600 6.5% Over 120 days outstanding 5,600 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,200 prior to the adjustment (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $3,880 prior to the adjustment.
The following information was taken from the accounts receivable records of Sarasota Corporation as at December 31, 2020: Outstanding Balance Percentage Estimated to be Uncollectible 0 – 30 days outstanding $160,000 0.5% 31 – 60 days outstanding 66,000 2.5% 61 – 90 days outstanding 40,200 4.0% 91 – 120 days outstanding 20,600 6.5% Over 120 days outstanding 5,600 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,200 prior to the adjustment (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $3,880 prior to the adjustment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following information was taken from the
| Outstanding Balance |
Percentage Estimated to be Uncollectible |
|||
| 0 – 30 days outstanding | $160,000 | 0.5% | ||
| 31 – 60 days outstanding | 66,000 | 2.5% | ||
| 61 – 90 days outstanding | 40,200 | 4.0% | ||
| 91 – 120 days outstanding | 20,600 | 6.5% | ||
| Over 120 days outstanding | 5,600 | 10.0% |
(a) Prepare the year-end
(b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $3,880 prior to the adjustment.
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