Chapter 7

Chapter 7 Second Problem Before adjusting its accounts on December 31, Year 1, RMS Co. had a $200,000 balance in its Accounts Receivable account and a $4,000 credit balance in its Allowance for Doubtful Accounts account. RMS Co. estimates that 5% of its accounts receivable ending balance will be uncollectible. Prepare the journal entry to recognize Uncollectible Account Expense Accounts Receivable 200,000 Allowance for Doubtful Accounts 4,000 Amount Number of Days Past Due Current 0-30 31-60 61-90 Over 90 Days $ 9,000 6,000 3,000 2,000 2,200 Percent Likely to Allowance Balance be collected Needed 1% 5% 10% 20% 60% $ Chapter 7 Third Problem Using the aging of receivables schedule above, tell me what the journal entry would be to recognize Uncollectible Accounts Expense assuming you already have $1000 in your Allowance for Doubtful Accounts