Sell on Credit Corp.'s (SCC) aged accounts receivable list is available in Excel in the Project

Data file (See below)

Other pertinent facts include the following:

? SCC's balance in its "allowance for doubtful accounts" account on January 1, 20X7, was a

$4,600 credit.

? On March 31, 20X7, SCC unexpectedly collected a $1,950 accounts receivable due from

KML Corp. that it wrote off in 20X6.

? During the year, SCC wrote off a total of $3,800 in uncollectable accounts.

? SCC uses a balance sheet approach (aging method) to estimate its uncollectable accounts.

Based on historical experience, SCC provides for bad debts as follows:

Aging period

Days outstanding 0-30 31-60 61-90 > 91

Historical percent loss 1% 5% 10% 30%

Required:

a) What are all journal entries required during the year and at year end to properly reflect

SCC's accounting for its bad debt expense/allowance for doubtful accounts. Ensure that

your journal entry(ies) includes an explanation as to the nature of the transaction.

b) Can you help me T-account to reconcile the change in the opening (January 1, 20X7) and closing

(December 31, 20X7) balances in the allowance for doubtful accounts. Ensure that the

reconciliation includes all the journal entries you prepared in part (a). (1 mark)

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