the year 1 Question 1 2 The Firm is undecided about which base to use in estimating uncollectible accounts 3 On December 31, the balance in Accounts Receivable 280,000 and net credit sales amounted to $ 1,500,000 during 4 -An aging analysis of the accounts receivable indicated $ 30,000 that in accounts are expected to be uncollectible. 5 - past experience has shown that about 1.5% of net credit sales eventually are uncollectible. 6 7 Prepare the adjusting entries to record estimated bad debts expense using the 8 (1) percentage of sales method 9 (2) the percentage of receivable basis under each of the following independent assumptions: 10 (a )Allowance for Doubtful Accounts has a CREDIT balance $ 4.000 before adjustment 11 (b)Allowance for Doubtful Accounts has a DEBIT balance $ 1.000 before adjustment 12 13 Date Description Dr CR 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Question 2 30 Tech Ltd has a high rate of bad debts. End balance for the allowance for doubtful accounts will be based on the aging schedule shown. 31 Before the year end adjustments, the company's allowance for doubtful accounts balance c $15,000 CR 32 The year-end balance for the allowance for the allowance for doubtful accounts will be based on the aging schedule shown. 33 34 Complete the table for the estimated amount of bad debt of each aging category 35 ging Categol Bad Debt Balance Estimated Amount of Bad Debt 36 ss than 20 dal 2.00% $400.000 37 20 - 30 days 3.00% $200.000 38 31 -60 days 20.00% $27.000 39 61 + days 50.00% $28.000 40 41 a) Prepare the journal entry to record bad debt expense at year-end (December 31, 20x0). (Remember the starting balance) 43 b) Prepare the journal entry to record the write-off of Customer A's account on March 31, 20 $ 900 44 c) Customer Areturns and pays the account in full. Prepare the journal transactions to reverse the write-off and record the payment. 45 46 Date Description DR CR 47 48 49 50 51