Question
Sunland Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance for Doubtful Accounts is a debit of $5,000. The
Sunland Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance for Doubtful Accounts is a debit of $5,000.
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.
Number of Days Outstanding | ||||||||||
Total | 030 | 3160 | 6190 | 91120 | ||||||
Accounts receivable | $580,000 | $330,000 | $120,000 | $80,000 | $50,000 | |||||
Estimated % uncollectible | 2% | 6% | 10% | 30% | ||||||
Estimated uncollectible accounts | $ | $ | $ | $ | $ |
Record the bad debt adjusting entry using the information determined in part (a).
Account Titles and Explanation | Debit | Credit |
(To record estimate of uncollectible accounts.) |
In the following year, $22,000 of the outstanding accounts receivable is determined to be uncollectible. Record the write off of the uncollectible accounts.
Account Titles and Explanation | Debit | Credit |
(To record writeoff of accounts receivable.) |
|
The company collects $3,500 of the $22,000 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.
Account Titles and Explanation | Debit | Credit |
(To reverse write off.) | ||
(To record collection of previously written off account.) |
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