Problem 7-4 Uncollectible accounts [LO7-5, 7-6 Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2017 balance sheet disclosed the following: Current assetR Receivables, net of allovance for uncollectible accounts of $43,000 497,000 During 2018, credit sales were $1,815,000, cash collections from customers $1,895,000, and $52,000 in accounts recelvable were written off. In addition, $4,300 was collected from a customer whose account was written off in 2017. An aging of accounts recelvable at December 31, 2018, reveals the following: Percentage of Year-Ind Pere Age Group 0-60 days 61-90 days 91-120 days Over 120 days 60% 10 20 10 25 45 Required: 1. Prepare summary journal entries to account for the 2018 write-offs and the collection of the receivable previously written off 2. Prepare the year-end adjusting entry for bad debts according to each of the following situations: Bad debt expense is estimated to be 2% of credit sales for the year. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounis estimated to be 10% of the year-end balance in accounts receivable. a. b. c. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable. 3. For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2018 balance sheet? Complete this question by entering your answers in the tabs below. 3. For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2018 balarn sheet? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry required" the first account fleld.) View transaction list Journal entry worksheet Bad debt expense is estimated to be 2% of credit sales for the year. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal Pur stuauohs (8-c In Pequirement 2 above, what would be the net amount of accounts recelvable reported in the 20 sheet? Complete this question by entering your answers in the tabs below. Required 1Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry re the first account field.) View transaction list Journal entry worksheet es Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. Note: Enter debits before credits. Transaction General Journal DebitCredit b. Record entry Clear entry View general journal KPrev3 of 7Next> Required 1 Required 2 Required 3 Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry the first account field.) ok View transaction list Int Journal entry worksheet rences Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal
