Ask Question
1 February, 14:34

The company estimates future uncollectible accounts. The company determines $5,300 of accounts receivable on January 31 are past due, and 35% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record the adjustment for uncollectible accounts.

+4
Answers (1)
  1. 1 February, 14:55
    0
    Answer: The adjustment for uncollectible amount will be: Debit Bad debt expense $1,958.35 Credit Allowance for bad debt $1,958.35.

    Explanation: The answer above assumes that the balance in the account receivable is $5,300 not as past due. 35% of the account receivable balance is $1,855, resulting in an initial balance of $3,445, then further 3% of the balance will be $103.35. Therefore, the total bad debt expense will be $1,958.35. This will be debited to Bad debt expense and credited to Allowance for bad debt expense ledger. The credit to allowance for bad debt account is a balance sheet line and would further reduce the account receivable balance to $3,341.65.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The company estimates future uncollectible accounts. The company determines $5,300 of accounts receivable on January 31 are past due, and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers