Question

The company estimates future uncollectible accounts. The company determines $4,400 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record the adjusting entry for uncollectible accounts.

Answer 1

Answer:

Journal entry

Explanation:

Before passing the journal entry we need to do the following calculations

Uncollected amount is

= $4,400 × 50%

= $2,200

Uncollected amount is

= ($4,400 - $2,200) × 0.03

= $2,200 × 0.03

= $66

So, the total amount is

= $2,200 + $66

= $2,266

Now the journal entry is

Bad debt expense $2,266

        To Allowance for uncollectible accounts $2,266

(Being the uncollectible account is recorded)