On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,000. Jarden prepares a schedule of its December 31 accounts receivable by age.

Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible
$840,000 Not yet due 1.25%
336,000 1 to 30 days past due 2.00
67,200 31 to 60 days past due 6.50
33,600 61 to 90 days past due 32.75
13,440 Over 90 days past due 68.00

Required:
Prepare the adjusting entry to record bad debts expense.

Question

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Respuesta :

anthougo anthougo · Answer 1 · 2021-04-15T02:52:32+02:00

Answer:

Jarden Co

Adjusting Entry

December 31:

Debit Bad Debts Expense $27,731

Credit Allowance for Doubtful Accounts $27,731

To record bad debts expense.

Explanation:

a) Data and Calculations:

Allowance for Doubtful Accounts, unadjusted credit balance = $14,000

Accounts Age of Accounts Expected % Uncollectible

Receivable Receivable Uncollectible Allowance

$840,000 Not yet due 1.25% $10,500 ($840,000*1.25%)

336,000 1 to 30 days past due 2.00 6,720 ($336,000*2%)

67,200 31 to 60 days past due 6.50 4,368 ($67,200*6.5%)

33,600 61 to 90 days past due 32.75 11,004 ($33,600*32.75%)

13,440 Over 90 days past due 68.00 9,139 ($13,440*68%)

$1,290,240 $41,731

T-account:

Allowance for Doubtful Accounts

Account Titles Debit Credit

Beginning balance $14,000

Bad Debts Expense 27,731

Ending balance $41,731