The following summarizes the aging of accounts receivable for Johnston Supplies,

Question

The following summarizes the aging of accounts receivable for Johnston Supplies, Inc. as of July 31, 2016 Number of Days Unpaid Not yet due 1-30 days past due 31-60 days past due Over 60 days past due Total Accounts Receivable $127,600 $90,300 $54,700 $32,900 Historical % Uncollectible 5% 10% 16% 36% Required: a. The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $29,277 on July 31, 2016. Prepare the required adjusting entry to record Bad Debt Expense for the year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry to record bad debt expense for the year July 31, 2016 Note: Enter debits before credits Date General Journal Debit Credit July 31, 2016 Record entry Clear entry View general journal

Explanation / Answer

Solution a:

Therefore Ending Balance of allowance for Doubtful accounts = $36,006

Unadjusted Balance of allowance for Doubtful accounts = $29,277

Therefore, Bad debt Expense for july 31,2016 to be recorded = $36006 - $29277 = $6,729

Solution b:

Solution c:

Computation of July 31 Amount of Uncollectible Accounts Number of days unpaid Total Accounts Receivable Historical % uncollectible Uncollectible Amount Not Yet Due $127,600.00 5% $6,380.00 1-30 days past due $90,300.00 10% $9,030.00 31-60 days past due $54,700.00 16% $8,752.00 over 60 Days past due $32,900.00 36% $11,844.00 Total Amount of uncollectible accounts $36,006.00

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