Imagine Corporation prepares an aging schedule for its accounts receivable at the end of each month and records bad debts expense monthly. The following selected information is from Imagine's partial aging schedule at the end of August:

The unadjusted balance in Allowance for Doubtful Accounts is a debit of $4,300.
Instructions
(a) Complete the aging schedule and calculate the total estimated uncollectible accounts from the above information.
(b) 1. Prepare the adjusting journal entry to record the bad debts for the month using the information determined in part P8.4B(a)
2. Would your journal entry be different if the unadjusted balance in Allowance for Doubtful Accounts were a credit of $4,300?
(c) In September, management determined that $4,200 of the outstanding receivables were uncollectible. Prepare the journal entry to write off the uncollectible amount.
(d) Imagine Corporation subsequently collected $2,300 of the $4,200 that was determined to be uncollectible in part P8.4B (c). Prepare the journal entry(ies) to record the collection.

Transcribed Image Text:

Number of Days Outstanding Accounts Receivable Estimated Percentage Uncollectible 0-30 days 31-60 days 61-90 days Over 90 days Total $280,00o 90,000 45,000 18,500 $433,000 196 3% 10% 15%