PA8-1 Recording Accounts Receivable Transactions Using the Aging Method [LO8-2] The Kraft Heinz Company was formed in 2015 with the merger of Kraft Foods and H.J. Heinz Corporation. Assume the company reported the following amounts in its unadjusted trial balance (in millions) as of December 31, 2020: Required: 1. Assume Kraft Heinz uses 1/2 of 1 percent of sales to estimate its Bad debt expense for the year. Prepare the adjusting joumal entry required for the year, assuming no Bad debt expense has been recorded yet. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to the nearest whole dollar number no need to add the 6 zeros as your numbers are in millions already) Journal entry worksheet Note: Enter debits: before credits. 2. Assume instead that Kraft Heinz uses the aging of accounts receivable method and estimates that $390 million of its Accounts Recelvable will be uncollectible. Prepare the adjusting journal entry required at December 31, 2020, for recording Bad Debt Expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field, Enter your answers in millions - no need to add the 6 zeros as your numbers are in millions already.) Journal entry worksheet Note: Enter debits berore credits. 3. Assume instead that Kraft Heinz uses the aging of accounts receivable method and estimates that $390 million of its Accounts Receivable will be uncollectible. Also, assume that the unadjusted balance in Kraft Heinz's Allowance for Doubtful Accounts at December 31, 2020, was a debit balance of $21 million. Prepare the adjusting journal entry required at December 31,2020 , for recording bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions - no need to add the 6 zeros as your numbers are in millions already.) Journal entry worksheet Note: Enter debits before credits. 4. If one of Kraft Heinz's main customers declared bankruptcy in 2021, what journal entry would be used to write off its $19 milllon balance? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions - no need to add the 6 zeros as your numbers are in millions already.) Journal entry worksheet Record the entry to write-off the uncollectable account. Notet Enter debits before credits
