This is an aging schedule for Cain Company:

At December 31, 2001, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $10,000.
Instructions

(a) Journalize and post the adjusting entry for bad debts at December 31, 2001. (Use T accounts.)

(b) Journalize and post to the allowance account these 2002 events and transactions:
1. March 1, a $600 customer balance originating in 2001 is judged uncollectible.
2. May 1, a check for $600 is received from the customer whose account was written off as uncollectible on March 1.

(c) Journalize the adjusting entry for bad debts at December 31, 2002, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,100 and the aging schedule indicates that total estimated bad debts will be $29,100.

Transcribed Image Text:

Customer Aber Bohr Case Datz Others Not Yet Number of Days Past Due Total Due 1-30 31-60 61-90 Over 90 $ 20,000 $ 9,000 $11,000 30,000 $ 30,000 50,000 15,000 5,000 $30,000 38,000 $38,000 Estimated percentage uncollectible Total estimated bad debts 120,000 92,000 15,000 13,000 $258,000 $137,000 $29,000 $24,000 $30,000 $38,000 3% 6% 12% 24% 50% $ 34,930 $4,110 $1,740 $ 2,880 $7,200 $19,000