Youmin has accounts receivable of $95,400 at march 31, 2021 (amounts in thousands). Credit terms are 2/10, n/30. At march 31, 20

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Youmin has accounts receivable of $95,400 at march 31, 2021 (amounts in thousands). Credit terms are 2/10, n/30. At march 31, 20

21, there is a $2,100 credit balance in allowance for doubtful accounts prior to adjustment. The company uses the percentage‐of‐receivables basis for estimating uncollectible accounts. The company's estimates of bad debts are as shown below.

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1 answer:

Elodia [21] · Answer 1 · 2022-09-04T15:59:32+03:00

Based on the information given bad debt expense is $8,675 and the journal entry is: Debit Bad debt $6,575; Credit Allowance for Doubtful Account $6,575.

<h2>a. Bad debt expense:</h2>

Accounts Receivable Amount % Estimated Uncollectible

Current $65,000 2% $1,300

1–30 days past due $12,900 5% $645

31–90 days past due $10,100 30% $3,030

Over 90 days past due $7,400 50% $3,700

Total $8,675

<h2>b. Journal entry:</h2>

March 31 2021

Debit Bad debt $6,575

Credit Allowance for Doubtful Account $6,575

($8,675-$2,100)