Question

Presented below is an aging schedule for the Ivan Company at December 31, 2020:

Customer	Balance	Not Yet Due	1-30 past due	31-60 past due	61-90 past due	Over 90
Culberson	$24,000		$ 9,000	$15,000
Samsa	30,000	$30,000
Burks	50,000	5,000	5,000		$40,000
Greuel	38,000					$38,000
Others	120,000	72,000	35,000	13,000
	$262,000	$107,000	$49,000	$28,000	$40,000	$38.000
% estimated uncollectible		3%	7%	12%	24%	60%
Total estimated uncollectible	$42,400	$3,210	$3,430	$3,360	$9,600	$22,800

At December 31 2020, the unadjusted balance in Allowance for Doubtful Account is a credit of $10,000.

Instructions: Cut and paste the general journal below in your window and use it to journalize your entries to answer questions A, C, And D.

[A] Using information above, record the adjusting entry to adjust the allowance for doubtful accounts at December 31, 2020.

General Journal:

Question#	Account	Debit	Credit

[B] What is the net (cash) realizable value of accounts receivable after the adjustment is made to record bad debt expense?

(please label answer clearly in your solution/window)

[C] Journalize the following events that occurred in 2021. If no journal entry is required please indicate that no entry is necessary. Use the general journal that you cut and paste in your solution to answer the question.

(1) March 1, a customer with an accounts receivable balance of $400 is deemed uncollectible.

      (2) May 1, a check for $400 is received from the customer above.

[D] Journalize the entry to adjust the allowance for doubtful accounts at December 31, 2021 assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,400 and the aging schedule indicates that total estimated collectible accounts will be $36,700.

Answer 1

Requirement A:

Date	General Journal	Debit	Credit
Dec.31,2020	Bad debt expense [42400-10000]	$ 32,400
	Allowance for doubtful accounts		$ 32,400
	(To record bad debt expense)

Requirement B:

net (cash) realizable value of accounts receivable = $ 262,000- $ 42,400 = $ 219,600

Requirement C:

Date	Account Titles and explanations	Debit	Credit
Mar.01,2020	Allowance for doubtful accounts	$       400
	Accounts receivable		$       400
	(To record write off)
May.01,2020	Accounts receivable	$       400
	Allowance for doubtful accounts		$       400
	(To reverse write off)
May.01,2020	Cash	$       400
	Accounts receivable		$       400
	(To record collection of write off)

Requirement D:

Date	General Journal	Debit	Credit
Dec.31,2021	Bad debt expense [36700+1400]	$ 38,100
	Allowance for doubtful accounts		$ 38,100
	(To record bad debt expense)