Question: Question: Corp. made $1,500,000 in sales during 2017. Twenty percent o

Question

Question:

Question:Corp. made $1,500,000 in sales during 2017. Twenty percent of these were cash sales. During the year, $72,000 of accounts receivable were written off as being uncollectible. In addition, $40,000 of the accounts that were written off in 2016, were unexpectedly collected in 2017. At its' year-end December 31, 2017, Diebold had a balance of $525,000 in accounts receivable. The balance in the Allowance for Doubtful Accounts general ledger account was $112,500 credit at December 31, 2017.

Table:

Age (days) A/R

1-30 $210,000

31-60 $105,000

61-90 $52,500

91-120 $126,000

Over 120 $31,500

Total $525,000

Questions:

Prepare journal entries to record the following 2017 transactions:

The write-off of $72,000

The recovery of $40,000

Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2017.

The estimated uncollectible accounts at December 31, 2017 are calculated as follows:

Table:

Age (days) Estimated Loss Percentage

1-30 2%

31-60 4%

61-90 6%

91-120 10%

Over 120 40%

Question: Prepare the adjusting entry required at December 31, 2017.

Explanation / Answer

Journal entries 1 Allowance for doubtful accounts 72000               Accounts receivable 72000 2 Accounts receivable 40000             Allowance for doubtful accounts 40000 Cash 40000           Accounts receivable 40000 Allowance for doubtful accounts Debit Credit Beginning balance 112500 Write off 72000 Recovered 40000 Total 72000 152500 Balance 80500 Accounts receivable % uncollectible Uncollectible amount 1-30 days 210000 2% 4200 31-60 days 105000 4% 4200 61- 90 days   52500 6% 3150 90-120 days 126000 10% 12600 Over 120 days 31500 40% 12600 Total 525000 36750 Estimated balance of allowance for uncollectible 36750 Less Beginnning uncollectible balance 112500 Bad debt expense 75750 Allowance for doubtful accounts 75750             Bad debt expense 75750

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.