Question

A summary of Klugman Company's December 31, 2021, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:

Age Group	Amount	%
0-60 days	$58,000	0.5
61-90 days	21,000	1.0
91-120 days	2,880	10.0
Over 12 theta days	1,000	50.0

The allowance for uncollectible accounts had a balance of $1,380 on January 1, 2021. During the year, bad debts of $730 were written off. 

Required: 

Prepare all journal entries for 2021 with respect to bad debts and the allowance for uncollectible accounts. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.)

Answer 1

Requirement 1

Transaction	General Journal	Debit	Credit
1	Allowance for uncollectible Accounts	$              730.00
	Accounts receivable		$        730.00
	(To record write off of accounts)

Requirement 2

Transaction	General Journal	Debit	Credit
2	Bad debts expense	$              630.00
	Allowance for doubtful accounts		$        630.00
	(To record bad debts expense)

.Working

Days	Accounts receivables	x	Percent Uncollectable (%)	=	Estimated Uncollectable
0 TO 60	$      58,000.00	x	0.50%	=	$             290.00
61 to 90	$      21,000.00	x	1.00%	=	$             210.00
91 to 120	$        2,800.00	x	10.00%	=	$             280.00
Over 120	$        1,000.00	x	50.00%	=	$             500.00
Estimated balance of allowance for doubtful accounts					$         1,280.00

.

Beginning balance of Allowance for Bad Debts account	$    1,380.00
Less: Amount written off	$        730.00
Unadjusted balance for allowance for bad debts	$        650.00

.

Estimated balance of allowance for uncollectables	$    1,280.00	Cr
Balance in Allowance for uncollectable account (Cr)	$        650.00	Cr
Total bad debts to be recorded	$        630.00	Cr