Hello,

I am working on an accounting problem and I got stock. I am not understanding the differences in the T account entries for the Bad Debt Expense financial statement and the Allowance for Doubtful Account balance sheet. I am also stuck on the writ offs. Could you please help me understand this problem step by step.

The problem reads:

Rianna.com uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end.

First, prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $5,000 credit. Second, post the journal entry to the respective account ledgers.

Next, prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $4,000 debit. Second, post the journal entry to the respective account ledgers.

Of the above accounts, $5,000 is determined to be specifically uncollectible. First, prepare the journal entry to write off the uncollectible account. Then show the pre-write off and post write-off balance sheet classifications.

Rianna. com uses the allowance method of acocunting for bad debts. The company produced the following aging of the accounts receivable at year-end. Number of Days Outstanding Total 0-30 31-60 61-90 91-120 Over 120 Accounts Receivable $377,000 $222,000 $90,000 $38,000 $15,000 $12,000 % uncollectible 1% 4% 5% 8% Estimated Bad Debts $10,120 $2,220 $3,600 $1,900 $1,200 $1,200 Instructions ) Calculate the total estimated bad debts using the A/Raging schedule above. b.1) First, prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $5, 000 credit . Second, post the journal entry to the respective account ledgers. Balance Sheet - Permanent Account Debit Income statement - temporary account Credi Allow. For Doubtful Accts Bad Debt Expense Bad Debt Expense 5,120 $ 5,000 5,000 Allowence fo Doubtful Account 5,120 5,120 5,120 Is 10,120 Ts 10,120 b.2) First, prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful Accounts is a $4, 000 debit . Second, post the journal entry to the respective account ledgers. Balance Sheet - Permanent Account Income statement - temporary account Debit Credi Allow. For Doubtful Accts. Bad Debt Expense Bad Debbt Expense 14,120 S 4,000 4,000 Allowence for Doubtful Account 14,120 14,120 (10,120) 10,120 14,120 c) Of the above accounts, $5,000 is determined to be specifically uncollectible. First, prepare the journal entry to write off the uncollectible account. Then show the pre-write off and post write-off balance sheet classifications. Debit Credit Classified Balance Sheet Pre Write-Off Post Write-Off Accounts Receivable Less: Allowance for Doubtful Account The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entries necessary to restore the account and record the cash collection. Debit Credit e) Comment on how your answers to (a), (b.2), (c), and (d) would change if Rianna. com used 3% of total accounts receivable, rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? Allow. For Doubtful Accts