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Kent ud analysed its accounts receivable balances at 31 December 2020 and prepared an ageing analysis of the account as listed below. The percentage of
Kent ud analysed its accounts receivable balances at 31 December 2020 and prepared an ageing analysis of the account as listed below. The percentage of each aged group that have been proven uncollectable in the past are shown next to the aged balances. Estimated Age of Accounts Balance uncollectable Current 596 $140,000 50,500 8% 31-60 days past due 61-90 days past due Over 90 days past due 15%6 13,200 40% 5,750 a) The company uses the allowances method to account for bad debts. On the 31 December 2020 the credit balance of the Allowance for Doubtful Debts account was $3,200 before any adjustments. Required: Determine the total estimated uncollectable accounts for Kent Ltd at 31 December 2020 (2 marks) Prepare the adjusting entry at 31 December 2020 to record the bad debts expense (2 marks) Kent Lid's accountant decided to write of 10% of all accounts receivables outstanding for more than 90 days. Provide the journal (2 marks) d) il Kent Lid used the direct write-off method to account for bad debts how would your answers to part (a) to change? Discuss and provide the journal entry that Kent Ltd would prepare using the direct write oft method (3 marks) Word limit: maximum 50 words b) c) entry to record this amount
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