a$)$Complete the general journal by recording the following operations carried out by Daron inc. in December $2011.$

On December $5,2011,$ write$-$off of a client's account which had become uncollectible. This accounts receivable is worth $$7,000.$

GENERAL JOURNAL page $11$

Date: $05-$Dec$-11$

Account names and explanations: Bad Debts

F$\backslash$deg :

D$$bit: $7000$

Cr$$dit:

Date: $05-$Dec$-11$

Account names and explanations: Allowance for Doubtful debt

F$\backslash$deg :

D$$bit:

Cr$$dit: $7000$

Date: $05-$Dec$-11$

Account names and explanations: Allowance for Doubtful debt

F$\backslash$deg :

D$$bit: $7000$

Cr$$dit:

Date: $05-$Dec$-11$

Account names and explanations: Client Account

F$\backslash$deg :

D$$bit:

Cr$$dit: $7000$

On December $15,$ the company collected a customer account that had previously been written off. This customer account is worth $$3,500.$

GENERAL JOURNAL page $11$

Date: $15-$Dec$-11$

Account names and explanations: Client Ac

F$\backslash$deg :

D$$bit: $3500$

Cr$$dit:

Date: $15-$Dec$-11$

Account names and explanations: Bad Debts

F$\backslash$deg :

D$$bit:

Cr$$dit: $3500$

Date: $15-$Dec

Account names and explanations: Bank

F$\backslash$deg :

D$$bit: $3500$

Cr$$dit:

Date: $15-$Dec

Account names and explanations: Client Ac

F$\backslash$deg :

D$$bit:

Cr$$dit: $3500$

The following scriptures are provided to enable you to answer question b$).$

On December $31,2011,$ December credit sales of $$105,000$ are recorded in the journal.

GENERAL JOURNAL page $11$

Date: $31-$Dec$-11$

Account names and explanations: Client account

F$\backslash$deg : $1100$

D$$bit:

Cr$$dit: $105,000\mathrm{.}00$

Date: $31-$Dec$-11$

Account names and explanations: Sales

F$\backslash$deg :

D$$bit: $105,000\mathrm{.}00$

Cr$$dit:

On December $31,2011,$ the collections of customer accounts that took place in December are recorded in the journal. The amount of these collections amounts to $$104,000.$ This amount does not include the December $15$ receipt of $$3,500.$

GENERAL JOURNAL page $11$

Date: $31-$Dec$-11$

Account names and explanations: Cash

F$\backslash$deg :

D$$bit: $104,000\mathrm{.}00$

Cr$$dit:

Date: $31-$Dec$-11$

Account names and explanations: Client account

F$\backslash$deg : $1100$

D$$bit:

Cr$$dit: $104,000\mathrm{.}00$

b$)$

Here are the Accounts Receivable, Allowance for Doubtful Debts and Bad Debts accounts, as they appeared in the general ledger as of November $30,2011.$ Report the December $2011$ transactions, entered in the previous question, in these three accounts.

Client account N$\backslash$deg $1100$

Date: $30-$Nov$-11$

Detail: Balance

F$\backslash$deg :

D$$bit:

Cr$$dit:

Solde: $95,000\mathrm{.}00$ dt

Date: $31-$Dec$-11$

Detail: Sales

F$\backslash$deg :

D$$bit: $105000$

Cr$$dit:

Solde: $200000$ dt

Allowance for doubtful accounts N$\backslash$deg $1150$

Date: $30-$Nov$-11$

Detail: Balance

F$\backslash$deg :

D$$bit:

Cr$$dit:

Solde: $5,000\mathrm{.}00$ ct

Date: $05-$Dec$-11$

Detail: Bad Debt

F$\backslash$deg :

D$$bit:

Cr$$dit: $7000$

Solde: $12000$ ct

Date: $05-$Dec$-11$

Detail: Accounts Receivable

F$\backslash$deg :

D$$bit: $7000$

Cr$$dit:

Solde: $5000$ ct

Date: $31-$Dec$-11$

Detail: Bad Debt

F$\backslash$deg :

D$$bit:

Cr$$dit: $12200$

Solde: $17200$ ct

Bad debt N$\backslash$deg $5700$

Date: $30-$Nov$-11$

Detail: Balance

F$\backslash$deg :

D$$bit:

Cr$$dit:

Solde: $0\mathrm{.}00$

Date: $05-$Dec$-11$

Detail: Allowance for Doubtful Debt

F$\backslash$deg :

D$$bit: $7000$

Cr$$dit:

Solde: $7000$ dt

Date: $05-$Dec$-11$

Detail: Client Account

F$\backslash$deg :

D$$bit:

Cr$$dit: $3500$

Solde: $3500$ dt

Date: $31-$Dec$-11$

Detail: Allowance for Doubtful Debt

F$\backslash$deg :

D$$bit: $5429$

Cr$$dit:

Solde: $8929$ dt

c$)$

As of December $31,$ a chronological classification of customer accounts reveals that:

$60\%$ customer accounts are $1$ to $30$ days old

$30\%$ customer accounts are $31$ to $60$ days old

$10\%$ customer accounts are $61$ days old or more

The doubtful accounts are estimated to represent:

$1\%$ accounts from $1$ to $30$ days

$10\%$ accounts from $31$ to $60$ days

$25\%$ accounts of $61$ days or more.

Based on this estimate, calculate the amount of the provision for doubtful accounts to be established as of December $31,2011$ then make the resulting adjustment entry. Present the details of your calculations.

CALCULATIONS:

No$.$ of customer:

$1$ to $30$ days old customer: $120000$

$31$ to $60$ days old customer: $60000$

$61$ days or more customer: $20000$

Total: $200000$

Doubtful A$/$c: $12200$

GENERAL JOURNAL page $11$

Date: $31-$Dec$-11$

Account names and explanations: Bad Debts

F$\backslash$deg :

D$$bit: $12200$

Cr$$dit:

Date: $31-$Dec$-11$

Account names and explanations: Allowance for Doubtful Debt

F$\backslash$deg :

D$$bit:

Cr$$dit: $12200$

d$)$Report the adjustment you just calculated in question c$)$ in the general ledger accounts presented in question b$).$

e$)$Sales for $2011$ amounted to $$1,200,000.$ Instead of basing the assessment of bad debts on an analysis of customer accounts, we could have based it on the amount of sales.

Show what the adjusting entry would be if it had been estimated that bad debts represented $0\mathrm{.}3\%$ of sales. Present the details of your calculations.

GENERAL JOURNAL page $11$

Date:

Account names and explanations: Allowance for Doubtful Debt

F$\backslash$deg :

D$$bit: $8600$

Cr$$dit:

Date:

Account names and explanations: Bad Debts

F$\backslash$deg :

D$$bit:

Cr$$dit: $8600$

CALCULATIONS:

Sales: $1200000$

Bad Debts: $3600$

Adjustment: $8600$

f$)$What would be$,$ in the latter case, the regularized amount of the Provision for Doubtful Debts account?