Question
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2017, of $1,800. Required: a. Prepare the adjusting entry
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2017, of $1,800.
Required: a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
December 31, 2017 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible $ 120,000 Not due (under 30 days) 0.75 % 35,000 1 to 30 days past due 4 % 8,000 31 to 60 days past due 10 % 2,000 Over 60 days past due 60 % b. During 2018, credit sales were $1,200,000; sales discounts taken were $22,000; accounts receivable collected were $995,000; and accounts written off during the year totalled $24,000. Prepare the adjusting entry required on December 31, 2018, to estimate uncollectible receivables assuming it is based on the following aging analysis. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) December 31, 2018 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible $ 240,000 Not due (under 30 days) 0.75 % 75,000 1 to 30 days past due 4 % 20,000 31 to 60 days past due 10 % 11,000 Over 60 days past due 60 % c. Show how accounts receivable would appear on the December 31, 2018, balance sheet.
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