An aging analysis of Hagiwara Company?s accounts receivable at December 31, 2020 and 2021, showed the following:

Additional information:

1. At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts was a credit of $6,600.

2. In 2021, $23,500 of accounts was written off as uncollectible and $2,200 of accounts previously written off was collected.

Instructions

a. Prepare an aging schedule to calculate the estimated uncollectible accounts at December 31, 2020, and at December 31, 2021.

b. Calculate the carrying amount of Hagiwara?s accounts receivable at December 31, 2020, and December 31, 2021.

c. Record the following:

1. The adjusting entry on December 31, 2020

2. The write off of uncollectible accounts in 2021

3. The collection in 2021 of accounts previously written off

4. The adjusting entry on December 31, 2021

What are the implications of the changes in the age of the receivables from 2020 to 2021?

Transcribed Image Text:

Number of Days Estimated % Uncollectible 3% 6% 12% 25% Accounts Receivable 2021 2020 Outstanding 0-30 days 31-60 days 61-90 days Over 90 days $115,000 35,000 45,000 $145,000 38,000 24,000 80,000 Total $275,000 $270,000