P9-3A Journalize entries to record transactions related to bad debts Presented below is an aging schedule for Halleran Company. Customer Anders Blake Total $ 22,000 40,000 $ 40,000 Number of Days Past Due Not yet Due 1-30 31-60 61-90 $10,000 $12,000 Over 90 Coulson 57,000 16,000 6,000 35,000 Deleon 34,000 34,000 Others 132,000 96,000 16,000 14,000 6,000 $285,000 $ 152,000 $32,000 $26,000 $35,000 $40,000 Estimated Percentage Uncollectible 3% 6% 13% 25% 50% Total Estimated Bad Debts $ 38,610 $ 4,560 $1,920 $ 3,380 $8,750 $ 20,000 At December 31, 2017, the unadjusted balance in Allowance for Doutful Accounts is a credit of $12,000. Instructions: (a) Journalize and post the adjusting entry for bad debts at December 31, 2017. (b) Journalize and post the allowance account the following events and transactions in the year 2018. (1) On March 31, a $1,000 customer balance originating in 2017 is judged uncollectible. (2) On May 31, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 31. (c) Journalize the adjusting entry for bad debts on December 31, 2018, assuming that the unadjusted balance in the Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $31,600. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". Answer a) Date Date Account titles and details Dec-31 Bad debts expense ($20000-$12000) Allowance for doubtful debts Journal Entries Debit Credit $ 8,000.00 $ 8,000.00 To record the bad debt expense Bad debt expense Explanation Ref. Debit Credit Dec-31 Adjusting $ 8,000.00 Balance $ 8,000.00 Date Explanation Allowance for doubtful debts Ref. Debit Credit 2017 Dec-31 Balance 2018 Adjusting Mar-31 Write off 31-May Answer b) Date Account titles and details Mar-31 Allowance for doubtful debts Accounts Receivable Balance $ 12,000.00 $ 8,000.00 $ 20,000.00 $ 1,000.00 $ 19,000.00 S 1,000.00 $ 20,000.00 Journal Entries Debit Credit $ 1,000.00 $ 1,000.00 To record the write off May-31 Accounts Receivable $ 1,000.00 Allowance for doubtful debts $ 1,000.00 To record the reinstation May-31 Cash Accounts Receivable $ 1,000.00 $ 1,000.00 To record the collection Dec-31 Bad debt expense ($800+$31600) Accounts Receivable $ 32,400.00 $ 32,400.00 To record the bad debt expense 39 After you have completed the requirements of P9-3A, consider these additional questions. 0 Answers are on the other tab in this file. 2 11. Suppose the amount uncollectible on March 31 is changed to $1,800 and no cash was received from customer subsequent to the write-off of accounts receivable. What would be the balance of the Allowance for Dabtful Accounts before adjustment? 32. Suppose the balance in the Allowance for Doubtful Accounts before adjustment was $2,100 debit. An aging schedule indicates 4 that total estimated bad debts will be $38,000. What is the year-end adjustment for bad debts for 2017