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

$

59,000

0.5

61–90 days

21,500

1.0

91–120 days

2,900

10.0

Over 120 days

1,200

50.0

The allowance for uncollectible accounts had a balance of $1,390 on January 1, 2021. During the year, bad debts of $740 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

	Klugman Company
	Journal entries
Date	Particulars	Debit	Credit			Calculation
31-Dec	Allowance for uncollectible accounts	740
	Accounts Receivable		740
31-Dec	Bad Debt Expense	750				1400+740-1390
	Allowance for uncollectible accounts		750
	T Accounts
Allowance for uncollectible accounts
Date	Particulars	Debit	Credit
	Beginning Balance		1,390
31-Dec	Bad Debt written off	740
31-Dec	Bad Debt Expense		750			1400+740-1390
	Ending Balance		1,400
	Accounts receivable aging schedule					Calculation
	Age Group	Amount	%	Allowance
	0-60 days	59,000	0.5%	295		59000*0.5%
	61–90 days	21,500	1.0%	215		21500*1%
	91–120 days	2,900	10.0%	290		2900*10%
	Over 120 days	1,200	50.0%	600		1200*50%
	Totals	84,600		1,400