Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance...

Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance for uncollectible accounts.

1. Accounts not yet due $285,000; estimated uncollectible = 5% .

2. Accounts 1-45 days past due $39,600; estimated uncollectible = 10%

3. Accounts more than 45 days past due $15,800; estimated uncollectible = 15%

Before recording any adjustments, Dhaliwal has a debit balance of $71,100 in its allowance for uncollectible accounts.

Required:

1. Estimate the appropriate 12/31/2021 balance for Dhaliwal's allowance for uncollectible accounts.

2. What journal entry should Dhaliwal record to adjust its allowance for uncollectible accounts?

Expert Solution

285,000	5%	14,250
39,600	10%	3,960
15,800	15%	2,370
Balance in allowance for uncollectible accounts		20,580

Event	General Journal	Debit	Credit
Dec. 31, 2021	Bad debt expense (71,100+20,580)	91,680
	Allowance for uncollectible accounts		91,680

ekkarill92 answered 2 years ago

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Dhaliwal Digital categorizes its accounts receivable into three age groups for purposes of estimating its allowance...

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