Adjustment for Uncollectible Accounts Below is the aging of receivables schedule for Evers Industries. Aging of Receivables Schedule July 31 Customer Balance Not Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due Over 90 Days Past Due Subtotals 1,050,000 600,000 220,000 115,000 85,000 30,000 Boyd Industries 36,000 36,000 Hodges Company 11,500 11,500 Kent Creek Inc. 6,600 6,600 Lockwood Company 7,400 7,400 Van Epps Company 13,000 13,000 Totals 1,124,500 607,400 233,000 121,600 96,500 66,000 Percentage uncollectible 1% 3% 12% 30% 75% Allowance for Doubtful Accounts 106,106 6,074 6,990 14,592 28,950 49,500 Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $8,240 before adjustment on July 31. Journalize the adjusting entry for uncollectible accounts as of July 31. If an amount box does not require an entry, leave it blank. July 31
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Adjustment for Uncollectible Accounts
Below is the aging of receivables schedule for Evers Industries.
| Aging of Receivables Schedule July 31 |
||||||
| Customer | Balance | Not Past Due |
1-30 Days Past Due |
31-60 Days Past Due |
61-90 Days Past Due |
Over 90 Days Past Due |
| Subtotals | 1,050,000 | 600,000 | 220,000 | 115,000 | 85,000 | 30,000 |
| Boyd Industries | 36,000 | 36,000 | ||||
| Hodges Company | 11,500 | 11,500 | ||||
| Kent Creek Inc. | 6,600 | 6,600 | ||||
| Lockwood Company | 7,400 | 7,400 | ||||
| Van Epps Company | 13,000 | 13,000 | ||||
| Totals | 1,124,500 | 607,400 | 233,000 | 121,600 | 96,500 | 66,000 |
| Percentage uncollectible | 1% | 3% | 12% | 30% | 75% | |
| Allowance for Doubtful Accounts | 106,106 | 6,074 | 6,990 | 14,592 | 28,950 | 49,500 |
Assume that the allowance for doubtful accounts for Evers Industries has a credit balance of $8,240 before adjustment on July 31.
Journalize the
| July 31 | |||
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