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Problem #6: Allowance method entries for two years. Journal entries for Problem #6 Date Account Debit Credit Following represents selected information appearing on Harry Company's
Problem #6: Allowance method entries for two years. Journal entries for Problem #6 Date Account Debit Credit Following represents selected information appearing on Harry Company's schedule to estimate uncollectible accounts at 12/31/2019.: Number of days outstanding Total 0-30 31-60 61-90 91-120 Over 120 $300,000 $110,000 $70,000 $55,000 $35,000 $30,000 Accounts Receivable % Uncollectible 3% 6% 1 8 % 10% 20% Estimated bad debts a. Calculate the total estimated bad debts based on the above information. b. Prepare the year-end adjusting journal entry on 12/31/2019 to record the bad debts using the allowance method and the aged accounts receivable. Assume that the balance before adjustment in the allowance for doubtful accounts is $3,000 credit. C. During 2020, the company wrote off $30,000 of specific accounts receivable. Assuming that all of the write-offs occurred in one entry, make that entry to write off $30,000 of accounts receivable. d. During 2020, the company subsequently collected $2,000 of accounts that were written off. Make the journal entries necessary to restore the account and collect the cash. As of 12/31/2020 The aging analysis shows the following: Number of days outstanding Total Over 120 0-30 $100,000 3 1-60 $60,000 61-90 $75,000 91-120 $50,000 $330,000 $45,000 Accounts Receivable % Uncollectible 3% 6% 1 8 % 10% 20% Estimated bad debts e. Calculate the total estimated bad debts based on the above information. f. Prepare the year-end adjusting journal entry on 12/31/2020 to record the bad debts using the allowance method and the aged accounts receivable. g. Evaluate the quality or liquidity of receivables. Which year's receivables seem to be of higher quality? Why
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