Question

Required information

Answer 1

Answer and Explanation:

1.

The estimation of the required balances are as follows:

Age           Balance     Estimated              Estimated Uncollectible amount

of               Dec-31        Percentage

Accounts             Uncollectible

Not yet due $620,000    0.85%                         $5,270.00

1–30 days     $248,000    1.60%                          $3,968.00

31–60 days   $49,600      6.10%                          $3,025.60

61–90 days $24,800       30.75%                        $7,626.00

Over 90 days $4,960     64.00%                         $3,174.40

Total                $947,360                                        $23,064

2.

Now the journal entry is

but before that following calculation is needed

Ending balance of allowance for doubtful account $23,064

Less: Opening balance in allowance for doubtful account -$19,564

Bad debt expense for the year $3,500

The journal entry is

Bad debt expense $ 3,500  

       To Allowance for doubtful accounts $ 3,500

(Being bad debt expense is recorded)