Problem: Based on your inquiries, you note that $67,000 of accounts receivable had been written off during the year. The clerk had debited bad debt expense for $67,000 and credited Accounts Receivable for $67,000. When $15,000 of accounts previously written off had been collected, the accountant debited cash and credited sales. The company uses the allowance method based on the aging of accounts receivable. Based on this method, DeeDee determines that uncollectible accounts are $81,000 at the end of 2017.

a. How would I correct the information given above to obtain the correct adjusting journal entry? Combine journal entries when possible.

b. Using the allowance method based on the aging of accounts receivables, should the $67,000 be debited to bad debt expense or to Allowance for doubtful accounts, mentioned above?

c.Is $81,000 the ending balance for uncollectible accounts?

Thank you.

DeeDee Double Entry, Incorporated End of Period Worksheet For the Year Ended December 31, 2017 Unadjusted Account Title Trial Balance Adjustments CR CR Cash 240,300 Accounts Receivable 925,000 Allowance for Doubtful Accounts 49.000 Interest Receivable Merchandise Inventory 187,500 9000 Prepaid Insurance Prepaid Rent Office Supplie 7800 Note Receivable 75.000 Available for Sale Securities 380,000 4250.000 Office Building Accumulated Depreciation Office Building 1.650.000 Storage Building Accumulated Depreciation Storage Building Land Leasehold lmprovements 190,000 Accumulated Depreciation Leasehold lmprovements 125.000 Office Equipment 42.000 250.000 Paten usted Trial Balance DR CR