Accounts receivables ! Exam soon!
:D Hi ! I did the first 2 parts of the question, but can't get C & D :confused: Can someone please show me how to do it!
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[B]ABC Inc. generated $2.5 million in credit sales during the current year. Based on past experience, it is estimated that 1.5% of all credit sales will probe to be uncollectible. The balance of the allowance for doubtful accounts at December 31 is $6,900 credit before the year end adjustment for uncollectible accounts. Account receivable at December 31 consists of the follow:
Account Classification - Amount:
Current - $1,900,000
1-30 days past due - 150,000
31-60 days past due - 90,000
61-90 days past due - 50,000
Over 90 days past due - 20,000
a) Calculate bad debts expense and record the related journal entry for the current year using the percentage of credit sales method.
b) ABC has decided to write off all accounts that were over 90 days past due. Record the journal entry.
c) Show how Accounts Receivable will be presented on the Dec 31 balance sheet, with appropriate account balances, following the above adjustments. (HELP!! )
d) One of the customers whose $3000 accountat was written off paid in full. Record the journal entry. (HELP! )[/B
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///////My Answers//////
a) Bad debt expense = .015 x 2,500,000 = $37500
Journal Entry:
Debit: Bad Debt Expense 37500
Credit: Allowance for Doubtful Accounts 37500
b) Journal Entry:
Debit: Allowance for Doubtful Accounts 20000
Credit: Accounts Receivable 20000
Please someone help me with part c and d! Also can someone check if part a and b are right?
