Aging Method During 2013, Smith had $2,865,000 of credit sales, collected $2,905
ID: 2462305 • Letter: A
Question
Aging Method
During 2013, Smith had $2,865,000 of credit sales, collected $2,905,000 of accounts receivable, and wrote off $3,850 of accounts receivable as uncollectible. At year end, Smith performs an aging of its accounts receivable balance and estimates that $3,800 will be uncollectible.
Required:
1. Calculate Smith's preadjustment balance in accounts receivable on December 31, 2013.
$
2. Calculate Smith's preadjustment balance in allowance for doubtful accounts on December 31, 2013.
$
Account and Explanation
Debit
Credit
Correct 5 of Item 2
Correct 6 of Item 2
Correct 7 of Item 2
Correct 8 of Item 2
Record adjusting entry for bad debt expense estimate
Account and Explanation
Debit
Credit
Correct 5 of Item 2
Correct 6 of Item 2
Correct 7 of Item 2
Correct 8 of Item 2
Record adjusting entry for bad debt expense estimate
Explanation / Answer
1. Smith's preadjustment balance in accounts receivable on December 31, 2013.
= 382,000+28,65,000-29,05,000
=$342,000
..
..
2)Smith's preadjustment balance in allowance for doubtful accounts on December 31, 2013.
= 4200+3800
= 8000
..
..
Journal Entry
Debit Allowance for Doubtful Debts = 3,850
Credit Accounts Receivable = 3,850
..
Debit Bad Debt Expense = 3,800
Credit Allowance for Doubtful Debts = 3,800