Chapter 9, Problem 3PSA

At December 31, 2018, the Accounts Receivable balance of Solar Energy Manufacturing is $205,000. The Allowance for Bad Debts account has a $8,050 debit balance. Solar Energy Manufacturing prepares the following aging schedule for its accounts receivable: Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. Show the T-account for the Allowance for Bad Debts at December 31, 2018. Begin by determining the target balance of Allowance for Bad Debts by using the age of each account. Age of Accounts 1-30 31-60 61-90 Over 90 Total Days Days Days Days Balance Accounts Receivable $70,000 $85,000 $45,000 $5,000 Estimated percent uncollectible 0.5 % 5.0 % 7.0 % 46.0 % Estimated total uncollectible Journalize the year-end adjusting entry for bad debts on the basis of the aging schedule. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and…

On the year end of July 31, 2020, Rainbow Appliances had the following account balances before adjustments for bad debt was made. Net Credit Sales for the period $1,028,000 CR Accounts Receivable $656,000 DR AFDA $1,900 DR Do not enter dollar signs or commas in the input boxes. a) Use the year-end balances reported on the balance sheet and the aging schedule shown below to calculate the allowance for doubtful accounts. Aging Category Bad Debt % Balance Estimated Bad Debt Less than 30 days 2% $422,000 31-60 days 4% $105,000 61-90 days 11% $75,000 91-120 days 28% $37,000 Over 120 days 52% $17,000 Total $656,000 Prepare the journal entry to record bad debt expense for the year: Date Account Title and Explanation Debit Credit Jul 31 To record bad debt expense b) Assume instead that Rainbow Appliances used the income statement approach for estimating bad debt. If historical data indicates that approximately 2% of net credit sales are uncollectible, what amount is expected to be…

At December 31, 2022, the records of Kingbird, Inc. contained the following amounts before adjustment. Accounts Receivable Allowance for Doubtful Accounts (a) What amount of bad debt expense will Kingbird, Inc. report if its aging schedule indicates that $12,240 of accounts receivable will be uncollectible. Bad debt expense $ $216,000 1,800 (b) During the next month, January 2023, a $2,520 account receivable is written off as uncollectible. What amount of bad debt expense will Kingbird, Inc. report in January 2023? Bad debt expense $ (c) Repeat part (b), assuming that Kingbird, Inc. uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts receivable. Bad debt expense $