Question
The following is an aging schedule for a companys accounts receivable as at December 31, 2019: Number of days past due Customer's name Total amount
The following is an aging schedule for a companys accounts receivable as at December 31, 2019:
Number of days past due | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Customer's name | Total amount owed | Current (not yet due) | 130 | 3160 | 6190 | Over 90 | ||||||||
Aber | $32,000 | $9,000 | $23,000 | |||||||||||
Bohr | 46,000 | $46,000 | ||||||||||||
Chow | 52,000 | 15,000 | 22,000 | $15,000 | ||||||||||
Datz | 22,000 | $22,000 | ||||||||||||
Others | 158,000 | 95,000 | 15,000 | 13,000 | 15,000 | 20,000 | ||||||||
| $310,000 | $156,000 | $46,000 | $36,000 | $30,000 | $42,000 | ||||||||
Estimated percentage that will be uncollectible | 3% | 6% | 10% | 25% | 50% | |||||||||
Estimated value of uncollectibles | $39,540 | $4,680 | $2,760 | $3,600 | $7,500 | $21,000 |
On December 31, 2019, the unadjusted balance in the Allowance for Doubtful Accounts (prior to the aging analysis) was a credit of $16,000.
a. Journalize the adjusting entry for bad debts on December 31, 2019
b. Journalize the following selected events and transactions in 2020:
i. | On March 1, an $1,100 customer account that originated in 2020 is judged uncollectible. |
ii | On September 1, an $1,100 cheque is received from the customer whose account was written off as uncollectible on March 1. |
c. Journalize the adjusting entry for bad debts on December 31, 2020, assuming that the unadjusted balance in Allowance for Doubtful Accounts at that time is a debit of $1,000 and an aging schedule indicates that the estimated value of uncollectibles is $36,500.
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