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III. Accounts Receivables Activities (20 points) During the year of 2021, SAP Co. reported sales revenue of $800,000 (5300,000 were cash sales). On December 31,
III. Accounts Receivables Activities (20 points) During the year of 2021, SAP Co. reported sales revenue of $800,000 (5300,000 were cash sales). On December 31, 2021, SAP Co. has an accounts receivable balance of $150,000 before any year-end adjustments. The allowance for doubtful accounts had a $11,000 credit balance on January 1, 2021. During the year, SAP Co wrote off 57.000 uncollectible receivables, while collected $1,000 receivables that had been previously written off. An aging analysis of the year-end accounts receivable reveals the following: Days Outstanding A/R amount Estimated % Uncollectible 0-30 Days $75,000 31-60 Days 61-90 Days 25,000 10% >90 Days 10.000 50% $150,000 a) Given the information, please provide the journal entry to record estimated bad debt expense at the end of the year using each of the following methods, show your calculation process please. i. Using percentage-of-receivables method to accrue for bad debt expense. 40,000 294 4% ii. Using percentage-of-sales method to accrue for bad debt expense, assuming that the company expects approximately 1% of credit sales will eventually prove uncollectible. b) In January 2022, a $600 account that had previously been written off was collected. Please provide the journal entries for the collection. III. Accounts Receivables Activities (20 points) During the year of 2021, SAP Co. reported sales revenue of $800,000 (5300,000 were cash sales). On December 31, 2021, SAP Co. has an accounts receivable balance of $150,000 before any year-end adjustments. The allowance for doubtful accounts had a $11,000 credit balance on January 1, 2021. During the year, SAP Co wrote off 57.000 uncollectible receivables, while collected $1,000 receivables that had been previously written off. An aging analysis of the year-end accounts receivable reveals the following: Days Outstanding A/R amount Estimated % Uncollectible 0-30 Days $75,000 31-60 Days 61-90 Days 25,000 10% >90 Days 10.000 50% $150,000 a) Given the information, please provide the journal entry to record estimated bad debt expense at the end of the year using each of the following methods, show your calculation process please. i. Using percentage-of-receivables method to accrue for bad debt expense. 40,000 294 4% ii. Using percentage-of-sales method to accrue for bad debt expense, assuming that the company expects approximately 1% of credit sales will eventually prove uncollectible. b) In January 2022, a $600 account that had previously been written off was collected. Please provide the journal entries for the collection
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