2. Casilda Campany uses the aging approach to estimate bad debt expense. The end

Question

2. Casilda Campany uses the aging approach to estimate bad debt expense. The ending balance af each account receivable is aged on the basis of three time penads as follows: (1) not yet due, $50,100, (2) up to 180 days past due, S15,100, and (3 more then 180 days pas due SS 200 Experience has shown that or eech age group the ENerage loss rate on the ?mount o the recewables st yeer end due o colectibility s 1) 2 percent 2 12 percent ?nd 3 30 percent respectively At December 31 end of the current year, the Allowance for Doubtful Accounts balance is $300 (credit) before the end of period adjusting entry is made Required: No journal entry required" in t 0 View transaction Ilst Vew journal entry worksheet No Date General Journal Debit Credit 1December31 Bad debt expense Alowance for doubtlul accounts

Explanation / Answer

Answer 1. Days Outstanding Total Not Yet Due > 180 Days < 180 Days Accouunts Receivable            50,100.00          15,100.00        5,200.00    70,400.00 % Uncollectible 2% 12% 30% Amount Uncollectible               1,002.00            1,812.00        1,560.00      4,374.00 Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2 Bad Debts Expense    4,074.00    Allowance for Doubtful Accounts    4,074.00 (record the bad debt expenses) Allowance for Doubtful Accounts Beg. Bal.       300.00    4,074.00 Bad Debt Exp. (Bal. Fig.) End. Bal.    4,374.00 Answer 2. Balance Sheet (Partial) As on Dec 31 Current Assets Accounts Receivable    70,400.00 Allowance for Doubtful Accounts    (4,374.00) Net Accounts Receivable    66,026.00

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