Jim's Lawn Care

Chapter 9 Transactions

At the end of the current year, Accounts Receivable has a balance of $9,000; Allowance for Doubtful Accounts has a credit balance of $85; and net sales for the year total $30,000. Bad debt expense is estimated at .5% of net sales.

Using the Percent (%) of Sales Method Determine the appropriate adjusting journal entry to record the Bad Debt Expense

(Show your calculations):

Write the adjusting journal entry on the journal below:

Determine the adjusted balances in the following accounts after the above journal entry has been made: (Show your calculations):

Accounts Receivable:

Allowance for Doubtful Accounts:

Bad Debt Expense:

What is the net realizable value of accounts receivable? (Show your calculations):

An aging of the accounts receivable on December 31, and a historical analysis of the percentage of the uncollectible accounts for the industry in each age category are as follows:

Age Interval	Balance	Percent Uncollectible
Not past due	$57,000	%
1 30 days past due	5,000	3
31 60 days past due	2,000	7
61 90 days past due	2,500	15
91 - 180 days past due	1,000	40
Over 180 days past due	500	75

Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31. (Show your calculations) circle your answer:

Assuming that the allowance for doubtful accounts had a debit balance of $145 as of December 31, journalize the adjusting entry for uncollectible accounts as of December 31. (Show your calculations):