The following is an accounts receivable ageing schedule for Cain Ltd. 

At 31 December 2016 the unadjusted balance in Allowance for Doubtful Debts is a credit of $10 000. 

Required

(a) Journalise and post the adjusting entry for bad debts at 31 December 2016.

(b) Journalise and post to the allowance account these 2017 events and transactions.

(Use running-balance format.)

1. 1 March, a $600 customer balance originating in 2017 is judged uncollectable.

2. 1 May, a cheque for $600 is received from the customer whose account was written off as uncollectable on 1 March.

(c) Journalise the adjusting entry for bad debts at 31 December 2017, assuming that the unadjusted balance in Allowance for Doubtful Debts is a debit of $1100 and the ageing schedule of accounts receivable indicates that total estimated bad debts will be $29 100.

Transcribed Image Text:

Customer Aber Bohr Case Datz Major Ltd Estimated percentage uncollectable Total estimated bad debts Total $20 000 Not yet due 30 000 $ 30 000 50 000 15 000 38 000 120 000 $258 000 92 000 $137 000 Number of days past due 1-30 31-60 61-90 Over 90 $ 9000 $11 000 5000 15 000 $29 000 $30 000 $38 000 13 000 $24000 $30 000 $38 000 3% 6% 12% 24% $ 34930 $ 4110 $ 1740 $ 2880 $ 7200 50% $19000