Instructions

(a) Calculate the total estimated bad debts based on the above information.

(b) Prepare the year-end adjusting journal entry to record the bad debts using the allowance method and the aged uncollectible accounts receivable determined in (a). Assume the current balance in Allowance for Doubtful Accounts is a $3,000 credit.

(c) Of the above accounts, $1,600 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible accounts.

(d) The company subsequently collects $700 on a specific account that had previously been determined to be uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.

Worksheet.xls WN Total 0-30 $375,000 $220,000 Number of Days Outstanding 31-60 61-90 91-120 $90,000 $40,000 $10,000 4% 5% 8% Accounts receivable % uncollectible Estimated bad debts Over 120 $15,000 20% 1% 6 Number of Days Outstanding 31 60 61 90 91 120 0-30 Over 120 Total $375,000 Account Receivable Percent Uncollectible 1 % 4% 5% 8% 20% Estimated Bad Debts $ 11,600 (c) (d)