Question
An aging analysis of Sheridan Companys accounts receivable at December 31, 2020 and 2021, showed the following: Accounts Receivable Number of Days Outstanding Estimated %
An aging analysis of Sheridan Companys accounts receivable at December 31, 2020 and 2021, showed the following:
Accounts Receivable | ||||||||
Number of Days Outstanding | Estimated % Uncollectible | 2021 | 2020 | |||||
---|---|---|---|---|---|---|---|---|
030 days | 1% | $126,000 | $155,000 | |||||
3160 days | 8% | 31,500 | 77,500 | |||||
6190 days | 12% | 63,000 | 46,500 | |||||
Over 90 days | 35% | 94,500 | 31,000 | |||||
Total | $315,000 | $310,000 |
Additional information:
1. | At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts was a credit of $6,100. | |
2. | In 2021, $27,500 of accounts was written off as uncollectible and $2,700 of accounts previously written off was collected. |
Prepare an aging schedule to calculate the estimated uncollectible accounts at December 31, 2020, and at December 31, 2021.
2020 | ||||||||||
Number of Days Outstanding | Amount | % | Estimated Uncollectible | |||||||
030 days | $155,000 | 1% | $ | |||||||
3160 days | 77,500 | 8% | ||||||||
6190 days | 46,500 | 12% | ||||||||
Over 90 days | 31,000 | 35% | ||||||||
Total | $310,000 | $ |
2021 | ||||||||||
Number of Days Outstanding | Amount | % | Estimated Uncollectible | |||||||
030 days | $126,000 | 1% | $ | |||||||
3160 days | 31,500 | 8% | ||||||||
6190 days | 63,000 | 12% | ||||||||
Over 90 days | 94,500 | 35% | ||||||||
Total | $315,000 | $ |
Calculate the carrying amount of Sheridans accounts receivable at December 31, 2020, and December 31, 2021.
2020 | 2021 | |||
Carrying amount | $ | $ |
Record the following:
1. | The adjusting entry on December 31, 2020. | |
2. | The write off of uncollectible accounts in 2021. | |
3. | The collection in 2021 of accounts previously written off. | |
4. | The adjusting entry on December 31, 2021. |
(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation | Debit | Credit | |
1. | |||
(To record estimate of uncollectible accounts.) | |||
2. | |||
(To record writeoff of accounts receivable.) | |||
3. | |||
(To reverse write off.) | |||
(To record collection of previously written-off accounts.) | |||
4. | |||
(To record estimate of uncollectible accounts.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started