PA8-1 (Algo) Recording Accounts Receivable Transactions Using the Aging Method [LO 8-2] Grouch Mayor Companies was formed in 2015 with the merger of Henderson Incorporated and Tashamo Corporation. The company reported the following rounded amounts for the year ended December 29, 2018 (all amounts in millions): Debits Credits Accounts Receivable $ 1,090 Allowance for Doubtful Accounts $ 27 Sales (assume all on credit) 18,000 Required:

Assume Grouch Mayor uses 1/4 of 1 percent of sales to estimate its Bad Debt Expense for the year. Prepare the adjusting journal entry required for the year, assuming no Bad Debt Expense has been recorded yet. Assume instead Grouch Mayor uses the aging of accounts receivable method and estimates that $72 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense. Assume instead Grouch Mayors uses the aging of accounts receivable method and estimates that $72 of its Accounts Receivable will be uncollectible. Prepare the adjusting journal entry required at December 29, 2018, for recording Bad Debt Expense assuming Grouch Mayors unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $33.

If one of Grouch Mayors customers declared bankruptcy, what journal entry would be used to write off its $15 balance?

Create Journal entries:

1. Record the entry for bad debt expenses under the percentage of credit sales method.

2. Record the entry for bad debt expenses under the aging of accounts receivable method.

3. Record the adjusting entry for bad debts as of December 29, 2018 using the aging of accounts receivable method receivable method and assuming the unadjusted balance in Allowance for Doubtful Accounts at December 29, 2018, was a debit balance of $33.

4. Record the write-off of a certain customer account totaling $15 which is not collectible due to bankruptcy declared by the customer.