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Rogan Company uses the allowance method of accounting for doubtful accounts (i.e, bad debt). The company produced the following aging of the accounts receivable at
Rogan Company uses the allowance method of accounting for doubtful accounts (i.e, bad debt). The company produced the following aging of the accounts receivable at year end. Number of Days Outstanding Total 0-30 31-60 61-90 91-120 Over 120 Accounts Receivable $377,000 $222,000 $90,000 $38,000 $15,000 $12,000 % uncollectible 1% 4% 5% 8% 10% Estimated Bad Debts Required: a. Complete the above table to calculate the total estimated bad debts (fill in the shaded cells). b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). Assume the unadjusted balance in the Allowance for Doubtful accounts is $3,000 credit balance. C. If the Allowance for Doubtful accounts balance is a $4,000 debit balance prior to the adjusted entry, how would your entry from (b) above differ? d. Of the above accounts, $5,000 early in the next year is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. e. What is the net realizable value of accounts receivable that would be on the balance sheet before the write-off (part d) and after the write-off (part d)? Dobil Creally Accounts b. d. Net Realizable value, Before Write-off: Net Realizable value. After Write-off
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