Presented below is an aging schedule for Zillmann Company. Number of Days Past D

Question

Presented below is an aging schedule for Zillmann Company.
Number of Days Past Due

Customer Total No Yet Due 1-30 31-60 61-90 Over 90
Arndt $22,000 $10,000 $12,000
Blair 40,000 $40,000
Chase 57,000 16,000 6,000 $35,000
Drea 34,000 $34,000
Others 132,000 96,000 16,000 14,000 6,000
___________________________________________________________
$285,000 $152,000 $32,000 $26,000 $35,000 $40,000


Estimated percentage
uncollectible
3% 6% 13% 25% 60%
Total estimated
bad debts $42,610 $4,560 $1,920 $3,380 $8,750 $24,000



At December 31, 2012, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000.


A) Journalize the adjusting entry for bad debts at December 31, 2012.
Date Description/Account Debit Credit
Dec. 31




B) Post the adjusting entry for bad debts at December 31, 2012. Journalize and post to the allowance account the following events and transactions in the year 2013. (If answer is zero, please enter 0. Do not leave any fields blank.)
1. On March 31, a $1,000 customer balance originating in 2012 is judged uncollectible.
2. On May 31, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 31.
Date Description/Account Debit Credit
3/31/13

5/31/13

5/31/13
Accounts receivable


Bad Debts Expense
Date Explanation Debit Credit Balance
2012
Dec. 31 Adjusting


Allowance for Doubtful Accounts
Date Explanation Debit Credit Balance
2012
Dec. 31 Adjusting
31 Adjusting

2013
Mar. 31
May 31





Journalize the adjusting entry for bad debts on December 31, 2013, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $28,600.
Date Description/Account Debit Credit

12/31/13

Explanation / Answer

a. Journalize and post adjusting entry for bad debts at December 31, 2012. (Use T Accounts) Total Estimated Bad Debts = $42,610+ $4,560 +$1,920 +$3,380 +$8,750 +$24,000 = $85,220 84,800 - 12,000 = 73,220 adjustment Dr Bad Debt Expense 73,220 Cr Allowance for Doubtful Accounts 73,220 b. Journalize and post to the allowance account the following events and transactions in the year 2013 : a. March 31, a $1,000 customer balance originating in 2012 is judged uncollectible Dr Allowance for Doubtful Accounts 1000 Cr Accounts Receivable 1000 b.May 31, a check for $1,000 is received from the customer whose account was written off as uncollectible on March 31 Dr Accounts Receivable 1000 Cr Allowance for Doubtful Accounts 1000 Dr Cash 1000 Cr Accounts Receivable 1000 c. Journalize the adjusting entry for bad debts on December 31, 2013, assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estimated bad debts will be $28,600. Since there is a debit balance in the Allowance account, you would add the amount instead of subtracting it. 28,600 + 800 = 29,400 adjustment Dr Bad Debt Expense 29,400 Cr Allowance for Doubtful Accounts 29,400

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