Please work BE 7-6 please. Also please provide details on how the aging method i
ID: 2519080 • Letter: P
Question
Please work BE 7-6 please. Also please provide details on how the aging method is done for (b), (b) is the part I am having a lot of difficulites with . Thanks.
BE7-5 ILo Wilton, Inc: had net sales in 2017 of $1,400,000. At December 31, 2017, before adjusting entries, the balances in selected accounts were Accounts Receivable $250,000 debit, and Allowance for Doubtful Accounts $2,400 credit. If Wilton esti- mates that 8% of its receivables will prove to be uncollectible, prepare the December 31, 2017, journal entry to record bad debt expense BE7-6 (LO3)/Use the information presented in BE7-5 for Wilton, Inc. (a) Instead of an Allowance for Doubtful Accounts Balance of $2400 credit,the balance was $1,900 debit. Assume tha of accounts receivable will prove to be uncollectible. Prepare the b) Instead of estimating uncollectibles based on entry to record bad debt expense a percentage of receivables, assume Wilton prepares an aging schedule estimates total uncollectible accounts at $24,600. (Assume an allowance of $2,400 credit.) Prepare the entry to re- cord bad debt expenseExplanation / Answer
Answer
Accounts receivable balance on Dec 31, 2017
$250000
Debit
Uncollectible estimate 8% of above
$20000
Balance in Allowance for Doubtful accounts
$2400
Credit
Balance in Allowance for Doubtful accounts that should be after adjustments
$20000
Credit
Bad Debt Expenses will be [20000 – 2400]
$17,600
Date
Accounts Titles
Debit
Credit
31 Dec 3017
Bad Debt Expense
$17,600
Allowance for Doubtful accounts
$17,600
Part (a)
Accounts receivable balance on Dec 31, 2017
$250000
Debit
Uncollectible estimate 10% of above
$25000
Balance in Allowance for Doubtful accounts
$1900
Debit
Balance in Allowance for Doubtful accounts that should be after adjustments
$25000
Credit
Bad Debt Expenses will be debited by
$26,900
Date
Accounts Titles
Debit
Credit
Bad Debt Expense
$26,900
Allowance for Doubtful accounts
$26,900
Part (b)
Balance in Allowance for Doubtful accounts
$2400
Credit
Balance that should be after adjustments [equals to Uncollectible]
$24,600
Credit
Bad Debt Expenses will be debited by
$22,200
Date
Accounts Titles
Debit
Credit
31 Dec 2017
Bad Debt Expense
$22,200
Allowance for Doubtful accounts
$22,200
Accounts receivable balance on Dec 31, 2017
$250000
Debit
Uncollectible estimate 8% of above
$20000
Balance in Allowance for Doubtful accounts
$2400
Credit
Balance in Allowance for Doubtful accounts that should be after adjustments
$20000
Credit
Bad Debt Expenses will be [20000 – 2400]
$17,600