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Sammy's Small Engine Shop uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year, an
Sammy's Small Engine Shop uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year, an aging analysis of accounts receivable revealed the following: Accounts Estimated Account Age Receivable Uncollectible S 488,950 Not due yet 253,600 1-30 days overdue 101,350 31-60 days overdue 40,250 61-90 days overdue 24,000 91-120 days overdue 9,560 Over 120 days overdue 0.5% 1.0% 5.0% 15.0 % 35,0% 60.0% 917,710 Total a) Calculate the amount of the allowance for doubtful accounts that should appear on the curent balance sheet. 10 points Amount Uncollectible Uncollectible Accounts Estimated Receivable Account Age Not due yet 1-30 days overdue 31-60 days overdue 61-90 days overdue 91-120 days overdue Over 120 days overdue Total b) The balance of the allowance for doubtful accounts on January 1 of the current year was $28,300. The accounts receivable written off during the current year totaled $32,800. Prepare the journal entry showing the total accounts written off for the year. 5 points c) Calculate the bad debts expense that should be reported on the current year's income statement. New balance should be Less: Prelim total Expense 10 points d) Prepare the adjusting entry to record the bad debts expense on December 31 of the current year. 5 points
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