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SunLife Insurance prepares an aging schedule for its accounts receivable at the end of each month and records bad debts expense monthly. The following selected
SunLife Insurance prepares an aging schedule for its accounts receivable at the end of each month and records bad debts expense monthly. The following selected information is from SunLife's partial aging schedule at the end of July: The unadjusted balance in Allowance for Doubtful Accounts is a credit of $11,810. a) Complete the aging schedule and calculate the total estimated uncollectible accounts from the above information. b) Prepare the adjusting journal entry to record the bad debts using the information determined above. i. Would your journal entry be different if the unadjusted balance in Allowance for Doubtful Accounts were a debit of $11,810 ? c) In August, management determined that $49,270 of the outstanding receivables were specifically uncollectible. Prepare the journal entry to write off the uncollectible amount. d) SunLife insurance subsequently collected $9,370 of the $49,270 that was determined to be uncollectible above. Prepare the journal entry(ies) to record the collection. (Hint: one journal entry to reverse write off of account receivable, another journal entry to reverse collection of accounts receivable)
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