Question

Presented below is an aging schedule for Pearl Industries at December 31, 2021.

Customer		Total		Not Yet Due		Number of Days Past Due
						1–30		31–60		61–90		Over 90
Aneesh		$ 22,000				$ 8,200		$13,800
Bird		30,500		$ 30,500
Cope		46,000		5,300		4,500				$36,200
DeSpears		36,200										$36,200
Others		126,000		78,500		34,400		13,100
		$260,700		$114,300		$47,100		$26,900		$36,200		$36,200
Estimated percentage uncollectible				3%		7%		13%		26%		62%
Total estimated bad debts		$ 42,079		$ 3,429		$3,297		$3,497		$ 9,412		$22,444

At December 31, 2021, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $7,500.

Journalize the adjusting entry for bad debts at December 31, 2021 AND Post the adjusting entry for bad debts at December 31, 2021.AND Journalize the 2022 transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.	March 1, a $620 customer balance originating in 2021 is judged uncollectible.
2.	May 1, a check for $620 is received from the customer whose account was written off as uncollectible on March 1.

AND

Post to the allowance account these 2022 events. AND

Journalize the adjusting entry for bad debts at December 31, 2022, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,200 and the aging schedule indicates that total estimated bad debts will be $38,400.

Answer 1

Account titles and Explanation					Debit	Credit
Bad debts expense					34579
Allowance for Doubtful accounts						34,579
	Bad debts expense
12/31/2021	34579
12/31 bal	34579
Allowance for Doubtful accounts
		12/31 bal	7,500
		31-Dec	34579
		12/31bal	42,079
No	Date	Account titles and Explanation					Debit	Credit
1	3/1/2022	Allowance for Doubtful accounts					620
		Accounts receivable						620
2	5/1/2022	Accounts receivable					620
		Allowance for Doubtful accounts						620
		cash					620
		Accounts receivable						620
Allowance for Doubtful accounts
2021		12/31 bal	7,500
		31-Dec	34579
		12/31bal	42,079
2022
5/1/	620	1-Mar	620
Account titles and Explanation					Debit	Credit
Bad debts expense					39600
Allowance for Doubtful accounts						39600