Question

Urgent please help!!!!! The Accounts Receivable balance for Company at December​ 31, 2023​ was 29000 . During ​,2024 the company earned revenue of 462000 on account and collected 324000 on account. the company wrote off 6000 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 2​% of accounts receivable.
A. Assume the company had an unadjusted 2600 credit balance in Allowance for Bad Debts at ​31, . Journalize ​'s the company's December ​31, 2024 ​, adjustment to record bad debts expense using the​ percent-of-receivables method.



B. Assume the company had an unadjusted 1900 debit balance in Allowance for Bad Debts at December 31, 2024 . Journalize ​'s the company's December ​31, 2024 ​, adjustment to record bad debts expense using the​ percent-of-receivables method.

Answer 1

A) The journal entry using the percent-of-receivables method is as follows:

Debit Bad Debts Expense $6,620

Credit Allowance for Uncollectible accounts $6,620

B) The journal entry using the percent-of-receivables method is as follows:

Debit Bad Debts Expense $11,120

Credit Allowance for Uncollectible accounts $11,120

What is the percent-of-receivable method?

The percent-of-receivable method is one of the methods for making allowances for uncollectible accounts.  Other methods include using an estimated percentage of the sales revenue and aging the accounts receivable

This method uses an estimated percentage of the receivables at the end of the financial period to compute the ending allowance for uncollectible accounts.

Data and Calculations:

December 31, 2023:

Accounts receivable

Beginning balance = $29,000

Revenue for 2024 =  462,000

Cash collected =      (324,000)

Accounts written off = (6,000)

Ending balance        $161,000

Allowance for uncollecdtible accounts = 2% or $3,220 ($161,000 x 2%)

A) Allowance for uncollectible accounts:

Beginning balance = $2,600 (credit)

Accounts written off   (6,000)

Ending balance           (3,220)

Bad debts expense = $6,620

Transaction analysis

Bad Debts Expense $6,620 Allowance for Uncollectible accounts $6,620

B) Allowance for uncollectible accounts:

Beginning balance = ($1,900)

Accounts written off   (6,000)

Ending balance           (3,220)

Bad debts expense = $11,120

Transaction Analysis

Bad Debts Expense $11,120 Allowance for Uncollectible accounts $11,120

Learn more about making allowances for uncollectible accounts at brainly.com/question/15522384