Question
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2020, of $2,050. Required: a. Prepare the adjusting entry
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2020, of $2,050.
Required:
a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows.
December 31, 2020 Accounts Receivable Age of Accounts Receivable Expected Percentage
Uncollectible $ 140,000 Not due (under 30 days) 1 % 40,000 1 to 30 days past due 4 % 9,500 31 to 60 days past due 10 % 2,200 Over 60 days past due 60 %
b. During 2021, credit sales were $1,225,000; sales discounts taken were $23,000; accounts receivable collected were $1,042,700; and accounts written off during the year totalled $24,000. Prepare the adjusting entry required on December 31, 2021, to estimate uncollectible receivables assuming it is based on the following aging analysis.
December 31, 2021 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible $ 240,000 Not due (under 30 days) 1 % 74,000 1 to 30 days past due 4 % 21,000 31 to 60 days past due 10 % 15,000 Over 60 days past due 60 %
c. Show how accounts receivable would appear on the December 31, 2021, balance sheet.
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