Chapter 9, Problem 3AP

On December 31, Jarden Co.’s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age.

Required

1. 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31 using an aging of accounts receivable.
2. 2. Prepare the adjusting entry to record bad debts expense at December 31.

Analysis Component

1. 3. On June 30 of the next year, Jarden concludes that a customer’s $4,750 receivable is uncollectible and the account is written off. Does this write-off directly affect Jarden’s net income?