nce5 At December 31, Canton Imports Ltd. estimates that 4% of total accounts rec

Question

nce5 At December 31, Canton Imports Ltd. estimates that 4% of total accounts receivable will become uncollectible. Bornts receivable are $600,000 at the end of the year. Allowance for Doubtful Accounts has a credit balance of $3,600 BE8-5 R to recording any year-end adjusting entries. (a) Prepare the adjusting journal entry to record bad debts expense at December 31. (b) Assuming that Allowance for Doubtful Accounts had a debit balance of $4,000 instead of a credit balance of $3,600, how would the journal entry recorded in part (a) above change? RES-6 Refer to BE8-5 and assume that Canton Imports decides to refine its estimate of uncollectible accounts by preparing an aging schedule. (a) Complete the following aging schedule, and (b) prepare the adjusting journal entry at December 31 to record bad debts expense, assuming that the allowance account has a credit balance of $3,600. Total Estimated Uncollectible Accounts Accounts Receivable $368,000 120,000 72,000 40,000 $600,000 Estimated Percentage Uncollectible 1% 4% 1096 20% Number of Days Outstanding 0-30 days 31-60 days 61-90 days Over 90 days Total

Explanation / Answer

As per chegg guidelines we answer one question per post. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount BE8-5 Accounts receivable            600,000.00 Allowance for doubtful accounts 4% Total Allowance required = 600,000*4%              24,000.00 Existing balance in doubtful accounts Cr                3,600.00 More allowance required              20,400.00 Bad Debts Expense Dr              20,400.00 To Allowance for doubtful accounts              20,400.00 Accounts receivable            600,000.00 Allowance for doubtful accounts 4% Total Allowance required = 600,000*4%              24,000.00 Existing balance in doubtful accounts Dr              (4,000.00) More allowance required              28,000.00 Bad Debts Expense Dr              28,000.00 To Allowance for doubtful accounts              28,000.00

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