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Question: Corp. made $1,500,000 in sales during 2017. Twenty percent of these were cash sales. During the year, $72,000 of accounts receivable were written off

Question:Corp. made $1,500,000 in sales during 2017. Twenty percent of these were cash sales. During the year, $72,000 of accounts receivable were written off as being uncollectible. In addition, $40,000 of the accounts that were written off in 2016, were unexpectedly collected in 2017. At its' year-end December 31, 2017, Diebold had a balance of $525,000 in accounts receivable. The balance in the Allowance for Doubtful Accounts general ledger account was $112,500 credit at December 31, 2017.

Table:

Age (days) A/R

30-Jan $210,000

31-60 $105,000

61-90 $52,500

91-120 $126,000

Over 120 $31,500

Total $525,000

Questions:

Prepare journal entries to record the following 2017 transactions:

  1. The write-off of $72,000
  2. The recovery of $40,000
  3. Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2017.
  4. The estimated uncollectible accounts at December 31, 2017 are calculated as follows:

Table:

Age (days) Estimated Loss Percentage

1-30 2%

31-60 4%

61-90 6%

91-120 10%

Over 120 40%

Question: Prepare the adjusting entry required at December 31, 2017.

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