Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2023, of $2,300.

Required

a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows:

b. During 2024, credit sales were $1,457,000; sales discounts taken were $27,000; accounts receivable collected were $1,220,000; and accounts written off during the year totalled $29,000. Prepare the adjusting entry required on December 31, 2024, to estimate uncollectible receivables assuming it is based on the following aging analysis.

c. Show how accounts receivable would appear on the December 31, 2024, balance sheet.

Analysis Component:
Comment on the advantages and disadvantages of using an aging analysis for estimating uncollectible accounts.

Transcribed Image Text:

December 31, 2023 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible Not due (under 30 days) $155,000 45,000 1 to 30 days past due 10,500 2,500 31 to 60 days past due Over 60 days past due 1% 4% 10% 60%