E9.5 & E9.6

E9.5 (LO 2) The ledger of Costello Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances $20,000. Journalite entries to record allowance for doubtful accounts using two different bases. Instructions a. If Costello uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Costello determines that L. Dole's $1,400 balance is uncollectible. b. If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journal- ize the adjusting entry at December 31, assuming bad debts are expected to be 10% of accounts receivable. c. If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 6% of accounts receivable. E9.6 (LO 2) Godfreid Company has accounts receivable of $95,400 at March 31, 2020. Credit terms are 2/10, n/30. At March 31, 2020, there is a $2,100 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below. Determine bad debt expense, prepare the adjusting entry and Estimated Percentage Uncollectible 2% Age of Accounts Current 1-30 days past due 31-90 days past due Over 90 days past due Balance, March 31 2020 2019 $65,000 $75,000 12,900 8,000 10.100 2,400 7,400 1,100 $95,400 $86,500 5 30 50 Instructions a. Determine the total estimated uncollectibles. b. Prepare the adjusting entry at March 31, 2020, to record bad debt expense. c. Discuss the implications of the changes in the aging schedule from 2019 to 2020. lowance for Journalise write-off and recown