5) Jackson Inc. had the following breakdown of accounts receivable at December 3

Question

5) Jackson Inc. had the following breakdown of accounts receivable at December 31: Age of Accounts 1-30 days 31-60 days 61-90 days Over 90 days Total Amount Uncollectible 1% $12,000 4,000 3,600 400 $20,000 10% 50% At the end of the year, before adjustments, Jackson has a $25 credit in the allowance for doubtful accounts. a) What is the balance in Jackson's allowance for doubtful accounts at December 31? b) Give Jackson's journal entry to record bad debt expense for the year (December 31 adjusting entry) c) What is Jackson's net accounts receivable at December 31?

Explanation / Answer

a) Balance in jackson's in allowance for doubtful accounts at december 31 :

a) Balance in allowance for doubtful accounts at december 31 = 840

b) Journal entry :

c) Net account receivable = 20000-840 = 19160

Age of accounts Amount percent uncollectible Uncollectible amount 1-30 days 12000 1% 120 31-60 days 4000 4% 160 61-90 days 3600 10% 360 Over 90 days 400 50% 200 Total 20000 840

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