Question 4 (25 marks)

This question can be copied directly into your Word document. Your typing will be minimal. For each table in Word, please ensure column width is set to 1" and right aligned.

Part A. Complete the form below to age the accounts receivable. Provide the necessary end-of-year journal entry. You need to fill in the Totals row, the Dollar amount row, and prepare the journal entry.

Aging of accounts receivable (also called the balance sheet method):

Age	1-30 days	31-60 days	61-90 days	Over 90 days	Totals
Smith	70,000
Jones	20,000	20,000
White			200,000
Brown	40,000
Green	30,000
LeBlanc	50,000
Pelletier				20,000
Totals					450,000
Estimated uncollectible	1%	2%	10%	50%
Dollar amount

The Allowance for doubtful accounts currently has a credit balance of $25,000.

Journal entry to adjust for bad debts:

Dec. 31

Part B. Percentage of sales method (also called the income statement method):

Net credit sales are $5,000,000

Estimated bad debts are .2% of net credit sales.

Calculate the estimate and enter your answer in the box below.

$

Journal entry to adjust for bad debts:

Dec. 31

Part C. In the following year, on January 30, we wrote off the account of Pelletier.

On March 18, Pelletier won the lottery and repaid us. Prepare the journal entries.

Jan. 30
Mar. 18
18