Below is the “totals” section of XYZ Corporation’s full ageing schedule. XYZ wil

Question

Below is the “totals” section of XYZ Corporation’s full ageing schedule. XYZ will be using this information to estimate uncollectible accounts receivable at year-end.

                                                Number of Days Outstanding    

                Total      0-30      31-60   61-90    91-120 Over 120

Accounts receivable       $ 375,000            $ 220,000            $   90,000             $   30,000             $   20,000             $   15,000

% uncollectible                1%          4%          5%          9%          20%

Estimate bad debts

- The company subsequently collects $700 on a specific account that had previously been determined to be uncollectible in (d). Prepare the journal entry(ies) necessary to restore the account and record the cash collection.

Explanation / Answer

Answer:

Journal entries:

Accounts recievables Dr. 700

To allowance for doubtful accounts700

(To restore the account)

Cash Dr. 700

To accounts receivables 700

( To record cash collection)

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