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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? 

Solutions

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 3 years ago
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