Question
Sheridan Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance for Doubtful Accounts is a debit of $7,000. The
Sheridan Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance for Doubtful Accounts is a debit of $7,000.
The company produced the following information from aging its accounts receivable at year end. Complete the aging schedule and calculate the total estimated uncollectible accounts. (Round answers to 0 decimal places, e.g. 5,275.)
Number of Days Outstanding | ||||||||||
Total | 030 | 3160 | 6190 | 91120 | ||||||
Accounts receivable | $630,000 | $390,000 | $120,000 | $80,000 | $40,000 | |||||
Estimated % uncollectible | 2% | 5% | 10% | 30% | ||||||
Estimated uncollectible accounts | $ | $ | $ | $ | $ |
1. Record the bad debt adjusting entry using the information determined in part (a).
2. In the following year, $15,000 of the outstanding accounts receivable is determined to be uncollectible. Record the write off of the uncollectible accounts.
3. The company collects $4,000 of the $15,000 of accounts that was determined to be uncollectible in part (c). The company also expects to collect an additional $1,000. Record the journal entry (or entries) to restore the accounts receivable and the cash collected. Collection of the $1,000 is expected in the near future.
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