3 Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $40,000 $ 482,000 1 points During 2021, credit sales were $1,800,000, cash collections from customers $1,880,000, and $45,000 written off. In addition, $4,000 was collected from a customer whose account was written off in 2020. at December 31, 2021, reveals the following: accounts receivable were aging of accounts receivable Print Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year-End Receivables in Group 60% 10 20 10 Percent Uncollectible 33 5 25 45 References Required: 1. Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off. 2. Prepare the year-end adjusting entry for bad debts according to each of the following situations: a. Bad debt expense is estimated to be 2% of credit sales for the year. b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. c. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of accounts receivable. 3. For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet? Required 1 Required 2 Required 3 Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list X > 1 Record accounts receivable written off during the year 2021. 2 Record entry to reinstate an account receivable previously written off. 3 Record collection of an account receivable previously written off. Credit Required 1 Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list X > 1 Bad debt expense is estimated to be 2% of credit sales for the year. 2 Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. 3 Credit Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable. Required 1 Required 2 Required 3 For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet? Net account receivable reported a. b. C
