Chapter 5, Problem 84BPSB

Aging Method Bad Debt Expense

Carol Simon, the manager of Handy Plumbing has provided the following aging schedule for Handy’s accounts receivable:

Carol indicates that the $125,200 of accounts receivable identified in the table does not include $9,400 of receivables that should be written off.

Required:

1. Journalize the $9,400 write-off.

2. Determine the desired post adjustment balance in allowance for doubtful accounts.

3. If the balance in allowance for doubtful accounts before the $9,400 write-off was a debit of $550, compute bad debt expense. Prepare the adjusting entry to record bad debt expense.