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Kingbird Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end. (a) Calculate
Kingbird Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year-end.
(a) Calculate the total estimated bad debts based on the below information.
Number of Days Outstanding | ||||||||||||
Total | 030 | 3160 | 6190 | 91120 | Over 120 | |||||||
Accounts receivable | 259,200 | 90,700 | 56,900 | 49,400 | 34,800 | $27,400 | ||||||
% uncollectible | 1% | 4% | 5% | 8% | 20% | |||||||
Estimated Bad debts | $ | $ | $ | $ | $ | $ |
(b) | Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $7,500 debit. | |
(c) | Of the above accounts, $4,500 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. | |
(d) | The company collects $4,500 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. |
No | Account Titles and Explanation | Debit | Credit |
(b) | |||
(c) | |||
(d) | |||
(To reverse write-off.) | |||
(To record collection of write off.) |
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