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 companys fiscal year-end. The 2020 balance sheet disclosed the following:

Current assets:
Receivables, net of allowance for uncollectible accounts of $37,000	$	467,000

During 2021, credit sales were $1,785,000, cash collections from customers $1,865,000, and $42,000 in accounts receivable were written off. In addition, $3,700 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:

	Percentage of Year-End		Percent
Age Group	Receivables in Group		Uncollectible
060 days	60	%	3	%
6190 days	10		5
91120 days	20		25
Over 120 days	10		45

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:

1. Bad debt expense is estimated to be 2% of credit sales for the year.
2. 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.
3. 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?

If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Event	General Journal	Debit	Credit
1	1	Allowance for uncollectible accountsselected answer correct	42,000selected answer correct	not attempted
		Accounts receivableselected answer correct	not attempted	42,000selected answer correct
2	2	Accounts receivableselected answer correct	3,700selected answer correct	not attempted
		Allowance for uncollectible accountsselected answer correct	not attempted	3,700selected answer correct
3	3	Cashselected answer correct	3,700selected answer correct	not attempted
		Accounts receivableselected answer correct	not attempted	3,700selected answer correct

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	General Journal	Debit	Credit
1	a.	Bad debt expenseselected answer correct	35,700selected answer correct	not attempted
		Allowance for uncollectible accountsselected answer correct	not attempted	35,700selected answer correct
2	b.	Bad debt expenseselected answer correct	71,400selected answer incorrect	not attempted
		Allowance for uncollectible accountsselected answer correct	not attempted	71,400selected answer incorrect
3	c.	Bad debt expenseselected answer correct	not attempted	not attempted
		Allowance for uncollectible accountsselected answer correct	not attempted	not attempted

For situations (a)(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?

	Net account receivable reported
a.	not attempted
b.	not attempted
c.	not attempted