Corp. made $1,500,000 in sales during 2017. Twenty percent of these were cash sales. During the year, $72,000 of accounts receivable were written off as being uncollectible. In addition, $40,000 of the accounts that were
Corp. made $1,500,000 in sales during 2017. Twenty
percent of these were cash sales. During the year, $72,000 of accounts receivable were written off as being uncollectible. In addition, $40,000 of the accounts that were written off in 2016, were unexpectedly collected in 2017. At its’ year-end December 31, 2017, Diebold had a balance of $525,000 in accounts receivable. The balance in the Allowance for Doubtful Accounts general ledger account was $112,500 credit at December 31, 2017.
Table:
Age (days) A/R
30-Jan $210,000
31-60 $105,000
61-90 $52,500
91-120 $126,000
Over 120 $31,500
Total $525,000
Questions:
Prepare journal entries to record the following 2017 transactions:
- The write-off of $72,000
- The recovery of $40,000
- Recalculate the balance in the Allowance for Doubtful Accounts general ledger account at December 31, 2017.
- The estimated uncollectible accounts at December 31, 2017 are calculated as follows:
Table:
Age (days) Estimated Loss Percentage
30-Jan 2%
31-60 4%
61-90 6%
91-120 10%
Over 120 40%
Question: Prepare the adjusting entry required at December 31, 2017.
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