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1 Question 2: 6 marks (15 minutes) 2 Mephisto Inc. generated $2.75 million in credit sales during the current year. 4 The balance of
1 Question 2: 6 marks (15 minutes) 2 Mephisto Inc. generated $2.75 million in credit sales during the current year. 4 The balance of the allowance for doubtful accounts at December 31 is $2,500 debit. 5 Accounts receivable at December 31 consists of the following: 567 9 1-30 days 10 31-60 days 11 61-90 days 12 Over 90 days 13 14 15 Account Classification Amount Uncollectible $350,000 1.50% 180,000 3% 55,000 5% 21,000 25% 16 Required- 17 18 a) Calculate and record the journal entry for bad debt expense for the current year using the 19 aging of accounts receivable approach. 20 21 b) Mephisto has decided to write off $15,000 of the accounts that were over 90 days old. 22 Record the journal entry. 23 24 c) One of the customers whose $2,200 account was written off paid in full. Record the 25 journal entry (entries). 26
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