Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2020,
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Question:
Winfrey Designs had an unadjusted credit balance in its Allowance for Doubtful Accounts at December 31, 2020, of $1,850.
Required:
a. Prepare the adjusting entry assuming that Winfrey estimates uncollectible accounts based on an aging analysis as follows.
December 31, 2020 Accounts Receivable | Age of Accounts Receivable | Expected Percentage Uncollectible | ||||
$ | 126,000 | Not due (under 30 days) | 1 | % | ||
36,000 | 1 to 30 days past due | 4 | % | |||
8,500 | 31 to 60 days past due | 10 | % | |||
2,000 | Over 60 days past due | 60 | % |
b. During 2021, credit sales were $1,129,000; sales discounts taken were $21,000; accounts receivable collected were $959,500; and accounts written off during the year totalled $22,000. Prepare the adjusting entry required on December 31, 2021, to estimate uncollectible receivables assuming it is based on the following aging analysis.
December 31, 2021 Accounts Receivable | Age of Accounts Receivable | Expected Percentage Uncollectible | ||||
$ | 220,000 | Not due (under 30 days) | 1 | % | ||
68,000 | 1 to 30 days past due | 4 | % | |||
19,000 | 31 to 60 days past due | 10 | % | |||
13,000 | Over 60 days past due | 60 | % | |||
Related Book For
Fundamentals of Financial Accounting
ISBN: 978-0078025372
4th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby
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