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	$	68,000			0.5
61–90 days		26,000			1.0
91–120 days		3,800			10.0
Over 120 days		1,200			50.0

The allowance for uncollectible accounts had a balance of $1,480 on January 1, 2021. During the year, bad debts of $830 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

Answer
Computation of estimated un collectibles - Klugman Company
Age-group	Account receivables balance	Estimated percentage uncollectible	Estimated Uncollectible
0-60 days	$                      68,000	0.50%	$             340
61-90 days	$                      26,000	1%	$             260
91-120 days	$                        3,800	10%	$             380
Over 120 days	$                        1,200	50%	$             600
	$                      99,000		$          1,580

Journal Entries - Klugman Company
Event	Particulars	Debit	Credit
1	Allowance for uncollectible accounts Dr	$830
	To Accounts Receivables		$ 830
	(To record bad debts written off)
2	Bad debts Expense Dr ($1,580 + $830 - $1,480)	$930
	To Allowance for uncollectible accounts		$ 930
	(To record provision for uncollectible accounts recorded)