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Please write neatly! Worksheet 1 Number of Days Outstanding 2 Total 0-30 31-60 61-90 91-120 Over 120 3 Accounts receivable 400,000 154,000 92,000 78,000 46,000
Please write neatly!
Worksheet 1 Number of Days Outstanding 2 Total 0-30 31-60 61-90 91-120 Over 120 3 Accounts receivable 400,000 154,000 92,000 78,000 46,000 30,000 | 4 % uncollectible 2% 8% 10% 16% 20% 5 Estimated bad debts 6 7 Instructions (a) Calculate the total estimated bad debts based on the above information. (10%) (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 16,000 credit. (5%) (c) Of the above accounts, 10,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. (5%) (d) The company collects 10,000 subsequently on a specific account that had previously been deter- mined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection. (10%) (e) Comment on how your answers to (a)(d) would change if Ho used 8% of total. accounts receivable rather than aging the accounts receivable. What are the advantages to the company of aging the accounts receivable rather than applying a percentage to total accounts receivable? (5%) (f) Please explain the difference (at least two)between the direct write-off method and the allowance Method. (10%)Step by Step Solution
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