Financial Accounting: P8-3A Presented below is an aging schedule for Emporia Company

Financial Accounting 
Problem P8-3A Journalize entries to record transactions related to bad debts 
Presented below is an aging schedule for Emporia Company. 
Customer Total: Not Yet Due: Number of Days Past Due 
1-30 31-60 61-90 Over 90 
Arndt 22,000 10,000 12,000 
Blair 40,000 40,000 
Chase 57,000 16,000 6,000 35,000 
Drea 34,000 34,000 
Others 132,000 96,000 16,000 14,000 6,000 
285,000 152,000 32,000 26,000 35,000 40,000 
Estimated Percentage Uncollectible 3% 6% 13% 25% 60%
Total Estimated Bad Debit 42,610 4,560 1,920 3,380 8,750 24,000 

At December 31, 2011, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000. 

Instructions: 
(a) Journalize and post the adjusting entry for bad debts at December 31, 2011. The general ledger is provided below. 
(b) Journalize and post to the allowance account the following events and transactions in the year 2012. The general ledger is provided below. 
(1) March 31, an $1,000 customer balance originating in 2011 is judged uncollectible. 
(2) May 1, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 1. 
(c) Journalize the adjusting entry for bad debts on December 31, 2012. Assume that the unadjusted balance in Allowance for Doubtful 
Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $28,600.
Powered by