Bad Debt Expense, Aging of Accounts Receivable, Write-offs, Journal Entry. Cho Sportswear, Ltd. Developed an aged schedule of accounts receivable at the end of each year.

The company estimated an allowance for uncollectible accounts based on the following rules:

Aging Category	Allowance Provided
Current	5%
1-30 Days Past Due	9%
31-60 Days Past Due	20%
61-90 Days Past Due	55%*
Over 90 Days Past Due	80%*

*The percentages are applied after a specific review of all accounts in these aging categories.

After a specific review of the company’s accounts receivable, Cho’s credit manager decided to provide a full allowance against all Bauer Brands’ balances that are more than 60 days past due. The percentage allowance is applied to the 61-90 days and over 90 days past due aging categories only after deducting the balances due from Bauer Brands.

Cho reported net credit sales of $45,000,000 for the current year. We present the company’s ending balances of accounts receivable and the allowance for uncollectible accounts below:

Required ⟫

a. Compute the balance required in the allowance for uncollectible accounts at year-end.

b. Prepare the journal entry to record the bad debt provision for the current year.

c. Independent of your answer to part (b), prepare the journal entry to record the bad debt provision for foe current year assuming that the allowance for uncollectible accounts had a $331,000 debit balance.

d. Independent of your prior responses, prepare the journal entry to record bad debt provision for the current year assuming that the company estimates its uncollectible accounts at 3% of net credit sales.

e. In the following year, Cho’s credit management decided to write off all accounts that were over 90 days past due. Prepare the journal entry.

f. After the write-offs recorded in part (e), assume that Conroy Clothing pays the entire balance due. Prepare the journal entries required to record the subsequent recovery of the Conroy Clothing receivables.