Chapter 9, Problem 9.4E

Bad Debt Expense, Aging of Accounts Receivable. Journal Entry. Giaraldi Garden Products Inc developed an aged schedule of accounts receivable at the end of each year.

Giaraldi Garden Products: Aged Schedule of Accounts Receivable

			Past Due
Customer	Current	1-30 Days	31-60 Days	61-90 Days	Over 90 Days	Totals
Carey Company				$ 10,000	$34,500	$ 44.500
Gibson, Ltd	$423,000	$ 27000				450,000
KW Quarterly		33,000	$ 67,000		1,500	101,500
Onix Construction			100,000	45,000	90,500	235,500
Carpenter Lumber	387.000	125,000			500	512,500
Totals	$810,000	$185,000	$167,000	$55,000	$127,000	$1,344,000

The company estimated an allowance for uncollectible accounts based on the following estimates

Aging Category	Allowance Provided
Current	3%
1 -30 days past due	6
31-60 days past due	18
61-90 days past due	45
Over 90 days past due	100

Giaraldi reported net credit sales of $18,500,000 for the current year. We present the company’s of accounts receivable and the allowance for uncollectible accounts:

Required

1. a. Compute the balance required in the allowance for uncollectible accounts at the end of the year.
2. b. Prepare the journal entry to record the bad debt provision for the current year.
3. c. Independent of your answer to part (b) prepare the journal entry to record the bad debt provision for the current year assuming that the allowance for uncollectible accounts had a $30,000 debit balance.