7 Advanced Exercises and Problems Seved 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 $48,000 $ 522,000 During 2021, credit sales were $1,840,000, cash collections from customers $1,920,000, and $57,000 in accounts receivable were written off. In addition, $4,800 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year-End Percent Receivables in Group Uncollectible 70% 20 S 5% 15 20 40 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: of crodil sales for the year Help Save & Exi Chec 61-90 days 91-120 days Over 120 days 20 S 5 229 15 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 4% 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? Complete this question by entering your answers in the tabs below. 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.) Check Journal entry worksheet Ripped < 1 2 3 Book Pant ferences Record accounts receivable written off during the year 2021. Note: Enter debits before credits. Event 1 General Journal Debit Credit View general journal Record entry Clear entry Journal entry worksheet < 1 2 3 Record entry to reinstate an account receivable previously written off. Note: Enter debits before credits. Event 2 General Journal Debit Credit View general journal Record entry Clear entry ces Journal entry worksheet < 1 2 3 Record collection of an account receivable previously written off. Note: Enter debits before credits. Event 3 General Journal Debit Credit View general journal Record entry Clear entry ipped Book Print Journal entry worksheet 1 2 3 rences Bad debt expense is estimated to be 4% of credit sales for the year. Note: Enter debits before credits. Transaction B General Journal Debit Credit View general journal Record entry Clear entry Ded t nces Journal entry worksheet 1 2 3 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. Note: Enter debits before credits. Transaction b General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet < 1 2 3 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. Note: Enter debits before credits. Transaction General Journal Debit Credit C Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 HIS AURE UNIFICE For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet? a. b C Net account receivable reported < Required 2