Required information
Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3
[The following information applies to the questions displayed below.]
Jarden Company has credit sales of $3,100,000 for year 2017. On December 31, 2017, the companyâs Allowance for Doubtful Accounts has an unadjusted credit balance of $19,564. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
December 31, 2017
Accounts Receivable Age of
Accounts Receivable Expected Percent
Uncollectible $ 620,000 Not yet due 0.85 % 248,000 1 to 30 days past due 1.60 49,600 31 to 60 days past due 6.10 24,800 61 to 90 days past due 30.75 4,960 Over 90 days past due 64.00
Problem 9-3A Part 1
Required:
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Problem 9-3A Part 2
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
Required information
Problem 9-3A Aging accounts receivable and accounting for bad debts LO P2, P3
[The following information applies to the questions displayed below.]
Jarden Company has credit sales of $3,100,000 for year 2017. On December 31, 2017, the companyâs Allowance for Doubtful Accounts has an unadjusted credit balance of $19,564. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
| December 31, 2017 Accounts Receivable | Age of Accounts Receivable | Expected Percent Uncollectible | ||
| $ | 620,000 | Not yet due | 0.85 | % |
| 248,000 | 1 to 30 days past due | 1.60 | ||
| 49,600 | 31 to 60 days past due | 6.10 | ||
| 24,800 | 61 to 90 days past due | 30.75 | ||
| 4,960 | Over 90 days past due | 64.00 | ||
Problem 9-3A Part 1
Required:
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Problem 9-3A Part 2
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
Related questions
Jarden Company has credit sales of $2,800,000 for year 2017. On December 31, 2017, the companyâs Allowance for Doubtful Accounts has an unadjusted credit balance of $16,232. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
| DECEMBER 31, 2017 Accounts Receivable | âAge of Accounts Receivable | âExpected Percent Uncollectible |
| $560,000 | Not yet due | 0.85% |
| 224,000 | 1 to 30 days past due | 1.60 |
| 44,800 | 31 to 60 days past due | 6.10 |
| 22,400 | 61 to 90 days past due | 30.75 |
| 4,480 | Over 90 days past due | 64.00 |
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
| âACCOUNTS RECEIVABLE | âPERCENT UNCOLLECTIBLE (#.##%) | âESTIMATED UNCOLLECTIBLE | ||||
| âNot due: | X | ââ= | ||||
| â1 to 30: | âX | = | ||||
| 31 to 60: | âX | = | ||||
| â61 to 90: | âX | = | ||||
| âOver 90: | X | = |
âESTIMATED BALANCE OF ALLOWANCE FOR UNCOLLECTIBLES: __________ CREDIT OR DEBIT? _________
2. Prepare the adjusting entry to record bad debts expense at December 31, 2017.
Record the estimated bad debts.
| âDATE | âGENERAL JOURNAL | âDEBIT | âCREDIT |
| âDec 31 | |||
