Answer:
(1) $66,500
(3) $453,500
Explanation:
(1) Account receivable total:
= $400,000 + $50,000 + $40,000 + $30,000
= $520,000
Allowance for uncollectible account total:
= ($400,000 × 8%) + ($50,000 × 15%) + ($40,000 × 30%) + ($30,000 × 30%)
= $32,000 + 7,500 + $12,000 + $15,000
= $66,500
Balance of allowance for uncollectible accounts on 12/31/2021 is $66,500.
(2) Journal entry for adjusting the allowance for uncollectible account is :
Bad debt expense A/c Dr. $44,500
To Allowance for uncollectible account $44,500
(Adjusting entry)
Workings:
= Amount uncollectible - credit balance in its allowance for uncollectible accounts
= $66,500 - $22,000
= $44,500
(3) Net account receivable balance on 12/31/2021:
Accounts receivables total = $520,000
Allowance for uncollectible account = $66,500
Net Account Receivables:
= Accounts receivables total - Allowance for uncollectible account
= $520,000 - $66,500
= $453,500
