Question
At the beginning of the year the Slate Gravel Company has a $460.00 debit balance in their allowance for doubtful accounts account. During the year
At the beginning of the year the Slate Gravel Company has a $460.00 debit balance in their allowance for doubtful accounts account. During the year they had $415,000 in net credit sales.
a) Assuming the company uses the percentage of credit sales approach, record the adjusting journal entry to estimate this years bad debt expense:
[Assume bad debts 1.5% of net credit sales].
b) Using the following information from an aging schedule which was prepared:
Estimated
Total Percentage
Age Balance Uncollectible
0-30 days $50,000 1%
31-60 days 10,000 2%
61-120 days 4,000 5%
121-180 days 1,000 30%
over 180 days 2,000 50%
Assuming the firm uses the aging of receivables method, Record the adjusting journal entry to estimate this years bad debt expense:
c) If we determine Joe Nopay's account receivable of $300 is un-collectible, give the entry to record how his account will be written off.
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