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 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $33,000 $ 447,000 During 2021, credit sales were $1,765,000, cash collections from customers $1,845,000, and $38,000 in accounts receivable were written off. In addition, $3,300 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following: Age Group 0-60 days 61-90 days 91-120 days Over 120 days Percentage of Year-End Receivables in Group 70% 20 Onun Percent Uncollectible 5% 15 20 40 Required: 1. Prepare summary journal entries to account for the 2021 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: a. Bad debt expense is estimated to be 4% of credit sales for the year. b. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. c. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. 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 2021 balance sheet? Required 1 Required 2 Required 3 Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event Credit Debit 38,000 1 General Journal Allowance for uncollectible accounts Accounts receivable 1 38,000 2 2 3,300 Accounts receivable Allowance for uncollectible accounts 3,300 3 3,300 Cash Accounts receivable >> 3,300 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" in the first account field.) No Transaction Credit Debit 70,600 1 General Journal Bad debt expense Allowance for uncollectible accounts a. 70,600 2 b. 40,200 Bad debt expense Allowance for uncollectible accounts 40,200 3 C. 38,390 Bad debt expense Allowance for uncollectible accounts 38,390 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet? a. Net account receivable reported 428,600 325,800 327,610 b. $ C. $
