Question
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2023, of $1,900. Required: a. Prepare the adjusting entry
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2023, of $1,900. Required: a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows. December 31, 2023 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible $ 127,000 Not due (under 30 days) 1 % 37,000 1 to 30 days past due 4 % 8,500 31 to 60 days past due 10 % 2,100 Over
a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows.
December 31, 2023 Accounts Receivable | Age of Accounts Receivable | Expected Percentage Uncollectible | ||||
$ | 127,000 | Not due (under 30 days) | 1 | % | ||
37,000 | 1 to 30 days past due | 4 | % | |||
8,500 | 31 to 60 days past due | 10 | % | |||
2,100 | Over 60 days past due | 60 | % | |||
b. During 2024, credit sales were $1,252,000; sales discounts taken were $23,000; accounts receivable collected were $1,040,600; and accounts written off during the year totalled $25,000. Prepare the adjusting entry required on December 31, 2024, to estimate uncollectible receivables assuming it is based on the following aging analysis.
December 31, 2024 Accounts Receivable | Age of Accounts Receivable | Expected Percentage Uncollectible | ||||
$ | 250,000 | Not due (under 30 days) | 1 | % | ||
78,000 | 1 to 30 days past due | 4 | % | |||
21,000 | 31 to 60 days past due | 10 | % | |||
12,000 | Over 60 days past due | 60 | % | |||
c. Show how accounts receivable would appear on the December 31, 2024, balance sheet.
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