Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncol
ID: 2447377 • Letter: P
Question
Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings:
On the basis of past experience, the company estimated the percentages probably uncollectible for the above five age groups to be as follows: Group a, 1 percent; Group b, 3 percent; Group c, 10 percent; Group d, 20 percent; and Group e, 50 percent.
The Allowance for Doubtful Accounts before adjustment at December 31 showed a credit balance of $5,900.
instructions:
Assume that on January 10 of the following year, Putnam & Putnam learned that an account receivable that had originated on September 1 in the amount of $4,300 was worthless because of the bankruptcy of the client, Safeland Co. Prepare the journal entry required on January 10 to write off this account.
Putnam & Putnam, a legal firm, uses the balance sheet approach to estimate uncollectible accounts expense. At year-end, an aging of the accounts receivable produced the following five groupings:
Explanation / Answer
Date Accounts titles Debit Credit
Jan 10 Bad Debts $4300
Accounts receivable $4300
(being debts worth $4300 worthless recorded in the books )
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