Question
Problem 5-84A (Algorithmic) Aging Method Bad Debt Expense Cindy Bagnal, the manager of Cayce Printing Service, has provided you with the following aging schedule for
Problem 5-84A (Algorithmic) Aging Method Bad Debt Expense
Cindy Bagnal, the manager of Cayce Printing Service, has provided you with the following aging schedule for Cayce's accounts receivable:
Accounts Receivable Category Amount Proportion Expected to Default 0-20 days $88,700 0.02 21-40 days 21,500 0.08 41-60 days 11,700 0.15 Over 60 days 5,300 0.30 $127,200
Cindy indicates that the $127,200 of accounts receivable identified in the table does not include $8,900 of receivables that should be written off.
Required:
1. Journalize the $8,900 write-off.
Allowance for Doubtful Accounts 8,900 Accounts Receivable 8,900 Record write-off of defaulted account Feedback 2. Determine the desired postadjustment balance in allowance for doubtful accounts, Round each aging category to the nearest dollar. $ 6,839
Feedback 3. If the balance in allowance for doubtful accounts before the $8,900 write-off was a debit of $450, compute bad debt expense. Prepare the adjusting entry to record bad debt expense.
Bad Debt Expense Allowance for Doubtful Accounts Record adjusting entry for bad debt expense estimate
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