Presented below is an aging schedule for Loucks Company.

At December 31, 2014, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $16,000.
Instructions

(a) Journalize and post the adjusting entry for bad debts at December 31, 2014.

(b) Journalize and post to the allowance account the following events and transactions in the year 2015.

(1) March 1, a $1,900 customer balance originating in 2014 is judged uncollectible.

(2) May 1, a check for $1,900 is received from the customer whose account was written off as uncollectible on March 1.

(c) Journalize the adjusting entry for bad debts on December 31, 2015. Assume that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $2,000, and the aging schedule indicates that total estimated bad debts will be$38,300.

Transcribed Image Text:

Number of Days Past Due Not Total Yet Due 30,000 45,000 45,000 75,000 57,000 1-30 31-60 13,500 $16, Customer 61-90 Over 90 500 Alma Browne Conlon Dalton Others 22,500 7,500 45,000 $57,000 9,000 $396,000 205,500 $43,500 36,000 $45,000 $66,000 189,000 138,000 22,500 19,500 Estimated Percentage Uncollectible 2% 6% 10% 25% 400 Total Estimated Bad Debts $ 47.970 4,110S 2,610 3,600 S 11,250 526400