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Tutorial 18798

Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable...

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Question:

Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end.

                                                                Number of Days Outstanding

                                                Total               0-30      31-60     61-90       91-120    Over 120

Accounts receivable       $200,000    $77,000   $46,000 $39,000   $23,000     $15,000 

% uncollectible                                          2%               5%         8%            10%            15%                     

Required:

1              Calculate the total estimated bad debts based on the above information.

2              Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in the question above. Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit.

3              Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.

4              The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in the question above. Prepare the journal entry(ies) necessary to restore the account and record the cash collection

                 

 

ATTACHMENTS
question_6.xlsx