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Question 6: The following selected information is from Imagine Corporation’s partial aging schedule at the end...

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Accounting

Question 6: The following selected information is from ImagineCorporation’s partial aging schedule at the end of August:

Number of Days Outstanding:   Accounts Receivable:  Estimated Percentage Uncollectible: EstimatedUncollectible Accounts

0-30 days $280, 000 1%

31-60 days $90,000 3%

61-90 days $45,000 10%

Over 90 days $18,000 15%

Total: $433,000


The unadjusted balance in Allowance for Doubtful Accounts is adebit of $4,300.

Required

(a) Complete the aging schedule and calculate the totalestimated uncollectible accounts from the above information.

(b) Prepare the adjusting journal entry to record the bad debtsfor the month using the information determined in part (a)

(c) In September, management determined that $4,200 of theoutstanding receivables were uncollectible. Prepare the journalentry to write off the uncollectible amount.

(d) Imagine Corporation subsequently collected $2,300 of the$4,200 that was determined to be uncollectible in part (c). Preparethe journal entry(ies) to record the collection.

Answer & Explanation Solved by verified expert
3.6 Ratings (466 Votes)

a)

Age on account Dollar value Estimated uncollectible Uncollectible amount
0-30 Days $         280,000 1% $                                  2,800
31-60 Days $           90,000 3% $                                  2,700
61-90 Days $           45,000 10% $                                  4,500
More than 90 Days $           18,000 15% $                                  2,700
Total uncollectible amount $                                12,700

b)

Baddebt expenses ($12,700+$4,300) $   17,000
Allowance for doubtful accounts $   17,000

c)

Allowance for doubtful accounts $   4,200
Accounts receivable $   4,200

d)

Accounts receivable $   2,300
Allowance for doubtful accounts $   2,300
Cash $   2,300
Accounts receivable $   2,300

You can reach me over comment box if you have any doubts. Please rate this answer
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