Ho Publishers, uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end (¥ in thousands).

Instructions
a. Calculate the total estimated bad debts based on the above information.
b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a ¥8,000 debit.
c. Of the above accounts, ¥5,000 is determined to be specifi cally uncollectible. Prepare the journal entry to write off the uncollectible account.
d. The company collects ¥5,000 subsequently on a specifi c account that had previously been determined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.
e. Comment on how your answers to (a)–(d) would change if Ho used 4% of total accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable?

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Worksheet Review Page Layout Formulas Home Data View Insert P18 fx D B G Number of Days Outstanding 31-60 2 Total 91-120 Over 120 23,000 0-30 77,000 1% 61-90 39,000 4 Accounts receivable 200,000 % uncollectible 46,000 4% 15,000 20% 5% 8% 5 Estimated bad debts