Presented below is an aging schedule for Deep Canyon Company.

At December 31, 1996, the unadjusted balance in Allowance for Doubtful Accounts is a credit of \(\$ 10,000\).
\section*{Instructions}

(a) Journalize and post the adjusting entry for bad debts at December 31, 1996.

(b) Journalize and post to the allowance account the following 1997 events and transactions.
(1) March 31, an \(\$ 800\) customer balance originating in 1996 is judged uncollectible.
(2) May 31, a check for \(\$ 800\) is received from the customer whose account was written off as uncollectible on March 31.

(c) Journalize the adjusting entry for bad debts on December 31, 1997, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of \(\$ 800\) and the aging schedule indicates that total estimated bad debts will be \(\$ 28,300\).

Transcribed Image Text:

Customer Total Not Yet Due Number of Days Past Due 1-30 31-60 61-90 Over 90 Anita $ 22,000 $10,000 $12,000 Barry 40,000 $ 40,000 Chagnon 57,000 16,000! 6,000 David 34,000 $35,000 $34,000 ! Others 126,000 96,000 16,000 14,000 $279,000 $152,000 $32,000 $26,000 35,000 $34,000 Estimated Percentage Uncollectible 4% 7% 13% 25% 50% Total Estimated Bad Debts $ 37,450 $ 6,080 $ 2,240 $ 3,380 $ 8,750 $17,000