Nash Company had the following data on December 31, 20X1, before any adjustments: Accounts Receivable, December 31 Not past due $113,500 1 to 30 days past due $50,100 31 to 60 days past due $28,630 61 to 90 days past due $10,360 more than 90 days past due $4,500 Total Accounts Receivable, December 31 $207,090 Percentages of Accounts Receivable Estimated to be Uncollectible Not past due 2% 1 to 30 days past due 5% 31 to 60 days past due 10% 61 to 90 days past due 20% more than 90 days past due 50% Allowance for Doubtful Accounts, December 31 (before adjustment) $2,960 credit Total credit sales $4,094,000 Based on this data, estimate the amount of Bad Debt Expense that Nash Company should record in its December 31, 20X1 adjusting entry, and the ending balance (after adjustment) in the Allowance for Doubtful Accounts:
Allowance for Doubtful Accounts, Dec 31 (before adjustment): $2,960 credit
Bad Debt Expense:
Allowance for Doubtful Accounts, Dec 31 (after adjustment):
What is the Bad Debt Expense and Allowance for Doubtful Accounts, Dec 31 (after adjustment):
Nash Company had the following data on December 31, 20X1, before any adjustments: Accounts Receivable, December 31 Not past due $113,500 1 to 30 days past due $50,100 31 to 60 days past due $28,630 61 to 90 days past due $10,360 more than 90 days past due $4,500 Total Accounts Receivable, December 31 $207,090 Percentages of Accounts Receivable Estimated to be Uncollectible Not past due 2% 1 to 30 days past due 5% 31 to 60 days past due 10% 61 to 90 days past due 20% more than 90 days past due 50% Allowance for Doubtful Accounts, December 31 (before adjustment) $2,960 credit Total credit sales $4,094,000 Based on this data, estimate the amount of Bad Debt Expense that Nash Company should record in its December 31, 20X1 adjusting entry, and the ending balance (after adjustment) in the Allowance for Doubtful Accounts:
Allowance for Doubtful Accounts, Dec 31 (before adjustment): $2,960 credit
Bad Debt Expense:
Allowance for Doubtful Accounts, Dec 31 (after adjustment):
What is the Bad Debt Expense and Allowance for Doubtful Accounts, Dec 31 (after adjustment):
Related questions
Jarden Company has credit sales of $2,800,000 for year 2017. On December 31, 2017, the companyâs Allowance for Doubtful Accounts has an unadjusted credit balance of $16,232. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
| DECEMBER 31, 2017 Accounts Receivable | âAge of Accounts Receivable | âExpected Percent Uncollectible |
| $560,000 | Not yet due | 0.85% |
| 224,000 | 1 to 30 days past due | 1.60 |
| 44,800 | 31 to 60 days past due | 6.10 |
| 22,400 | 61 to 90 days past due | 30.75 |
| 4,480 | Over 90 days past due | 64.00 |
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
| âACCOUNTS RECEIVABLE | âPERCENT UNCOLLECTIBLE (#.##%) | âESTIMATED UNCOLLECTIBLE | ||||
| âNot due: | X | ââ= | ||||
| â1 to 30: | âX | = | ||||
| 31 to 60: | âX | = | ||||
| â61 to 90: | âX | = | ||||
| âOver 90: | X | = |
âESTIMATED BALANCE OF ALLOWANCE FOR UNCOLLECTIBLES: __________ CREDIT OR DEBIT? _________
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
Record the estimated bad debts.
| âDATE | âGENERAL JOURNAL | âDEBIT | âCREDIT |
| âDec 31 | |||
Kiley Company had a $900 credit balance in Allowance for Doubtful Accounts at December 31, 2005, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:
| Estimated Percentage | ||
| Uncollectible | ||
| Current Accounts | $120,000 | 1% |
| 1-30 days past due | 12,000 | 3% |
| 31-60 days past due | 10,000 | 6% |
| 61-90 days past due | 5,000 | 12% |
| Over 90 days past due | 8,000 | 30% |
| Total Accounts Receivable | $155,000 | |
Instructions
Please identify each of your answers with the letter of the transactions you are journalizing.
(a)Prepare the adjusting entry on December 31, 2005, to recognize bad debts expense.
(b)Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $700 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts.
(c)Assume that the company has a policy of providing for bad debts at the rate of 1% of sales, that sales for 2005 were $500,000, and that Allowance for Doubtful Accounts had a $550 credit balance before adjustment. Prepare the adjusting entry for the current year's provision for bad debts.
