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Betty/com uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at the year-end. Number of
Betty/com uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at the year-end.
Total | 0-30 | 31-60 | 61-90 | 91-120 | Over 120 | |
---|---|---|---|---|---|---|
Accounts Receivable | 550,000 | 379,000 | 92,000 | 47,000 | 20,000 | 12,000 |
% Uncollectible | --- | 1% | 4% | 5% | 8% | 11% |
Estimated Bad Debits | $12740 | $3790 | $3680 | $2350 | $1600 | $1320 |
Of the above accounts, $5,500 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. (List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) The company collects $5,500 subsequently on a specific account that had previously been determined to be uncollectible in part (c). Prepare the journal entries necessary to (1) restore the account and (2) record the cash collection. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
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