Concept explainers
Problem 9-3A Aging
On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of S 14,500. Jarden prepares a schedule of its December 31 accounts receivable by age.
» | B | _E_ | |
1 | Accounts | Age of | Expected Percent |
2 | Receivable | Accounts Receivable | Uncollectible |
3 | J830,000 | Not yet due | 1.25% |
254,000 | 1 to 30 days past due | 2.00 | |
: | 86,000 | 31 to 60 days past due | 6.50 |
6 | 38,000 | 61 to 90 days past due | 32.75 |
7 | 12,000 | Over 90 days past due | 68.00 |
Required
1. Compute the required balance of the Allowance for Doubtful Accounts at December 31 using an aging of accounts receivable.
2. Prepare the adjusting entry1 to record bad debts expense at December 31. Check (2) Dr. Bad Debts Expense, $27,150
Analysis Component 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?
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Chapter 9 Solutions
FUNDAMENTAL ACCT PRIN CONNECT ACCESS
- Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. The balance in Glencoes allowance for doubtful accounts at the beginning of the year was $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off. Required: 1. Determine bad debt expense. 2. Prepare the journal entry to record bad debt expense. 3. If Glencoe had written off $90,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed?arrow_forwardExercise 9-13 (Algo) Percent of accounts receivable method LO P3 Mazie Supply Company uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $120,000, and it estimates that 2% will be uncollectible.Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has:(a) a $2,040 credit balance before the adjustment.(b) a $600 debit balance before the adjustment.arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCorporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
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