Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Creative Co. uses the allowance method to estimate uncollectible accounts receivable. The computer produced the following aging of the accounts receivable at year end: Instructions
Creative Co. uses the allowance method to estimate uncollectible accounts receivable. The computer produced the following aging of the accounts receivable at year end:
Instructions
- Complete the aging schedule and calculate the total estimated uncollectible accounts from the above information.
- Record the bad debt adjusting entry using the above information.
- In the following year, $12,200 of the outstanding accounts receivable is determined to be uncollectible. Record the write off of the uncollectible accounts.
- The company collects $3,400 of the $12,200 of accounts receivable that were determined to be uncollectible in (c). No further amounts are expected to be collected. Prepare the journal entry (or entries) to record the collection of this amount.
- Comment on how your answers to parts (a) to (d) would change if Creative Co. used a percentage of total accounts receivable of 8% instead of aging the accounts receivable.
The unadjusted balance in Allowance for Doubtful Accounts is a credit of $5,000
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