Financial Accounting: P9-4A (a-d) Wall Inc. uses the allowance method to estimate uncollectible
Financial Accounting P9-4A (a-d) Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end. Number of Days Outstanding Total 0-30 31-60 61-90 91-120 Over 120 Accounts receivable 375,000 220,000 90,000 40,000 10,000 15,000 % uncollectible 1% 4% 5% 8% 10% Instructions: a. Calculate the total estimated bad debts based on the above information. b. Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in the question above. Assume the current balance in Allowance for Doubtful Accounts is a $8,000 debit. c. Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account. d. The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in C. Prepare the journal entry(ies) necessary to restore the account and record the cash collection.
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