Question

The following summarizes the aging of accounts receivable for Johnston Supplies, Inc. as of July 31, 2019:

Number of Days Unpaid   Total Accounts Receivable    Historical % Uncollectible
Not yet due   $   127,600         5   %     
1-30 days past due      90,300         10   %     
31-60 days past due      54,700         16   %     
Over 60 days past due      32,900         36   %     

Required:

The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $29,277 on July 31, 2019. Prepare the required adjusting entry to record Bad Debt Expense for the year.
Johnston Supplies, Inc. writes off $3,191 of uncollectible accounts on August 15, 2019. Prepare the required adjusting entry to record the write-off.
Use a T-account to determine the account balance in the Allowance for Doubtful Accounts on August 15, 2019.

Answer 1

Number of days	Total Accounts receivablle	%Uncollectible	Estimated Uncollectible Balance
Note yet due	127600	5%	6380
1-30	90300	10%	9030
31-60	54700	16%	8752
over 60 days	32900	36%	11844
Estimated uncollectible Balance at year end	36006

Bad debt expense = Estimated uncollectible Balance at year end-Unadjusted balance in allowance account

              = 36006 -29277

            = 6729

b)

Date	Account title	Debit	credit
August 15, 2019	Allowance for doubtful account	3191
	Accounts receivable		3191

c)

Allowance for doubtful account
15 August 2019	3191	Un-adjusted Balance on July 31 2019	29277
		Bad debt expense	6729
		Balance as on 15 Aug 2019	32815

the account balance in the Allowance for Doubtful Accounts on August 15, 2019. = 32815