Buffalo Industries uses the allowance method of accounting for bad debts. The company produced the following...

Buffalo Industries uses the allowance method of accounting for bad debts. The company produced the following aging of the accounts receivable at year-end.

1.Calculate the total estimated bad debts based on the information below.

# of days outstanding	total	0-30	31-60	61-90	91-120	over 120
Accounts receivable	$ 422,000	259,000	82,000	44,000	24,000	13,000
% uncollectible		1%	4%	5%	8%	11%
Estimated debt

2.Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined above. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,900 debit.

3.Of the above accounts, $4,700 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.

4.The company collects $4,700 subsequently on a specific account that had previously been determined to be uncollectible in part (c). Prepare the journal entries necessary to (1) restore the account and (2) record the cash collection.

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Expert Solution

ekkarill92 answered 1 year ago

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