QUESTION 1: (15 marks)

XYZ Corp. had an unadjusted $3,500 credit balance in Allowance for Doubtful Accounts at December 31, 2021, before the current year's provision for uncollectible accounts. The Ageing Schedule reveals the following information:

Uncollectible Estimated Percentage

Current Accounts Receivable $150,000 0.5%

1-30 days past due 70,000 4 %

31-60 days past due 10,000 8 %

61-90 days past due 5,000 20%

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$ 235,000

Required:

A. XYZ decided to write off an overdue account, $2,000. Prepare the journal entry for this write off, using a date of December 31.

B. Prepare the adjusting journal entry, on XYZs fiscal year-end December 31, 2021 relating to accounts receivables uncollectibles.

C. Show the balance sheet representation showing Accounts Receivable and net Accounts Receivables at December 31, 2021.

D. In a few words, explain how the write off of an account receivable impacts net Accounts Receivable?