P8.
3A Journalize transactions related to bad debts
Presented below is an aging schedule for Bryan Company at December 31, 2021.
Not Yet Number of Days Past Due
Customer Total Due 1-30 31-60
Aneesh $24,000 $9,000 $15,000
Bird 30,000 $30,000
Cope 50,000 5,000 5,000
DeSpears 38,000
Others 120,000 72,000 35,000 13,000
$262,000 $107,000 $49,000 $28,000
Estimated percentage
uncollectible 3% 7% 12%
Total estimated
bad debts $42,400 $3,210 $3,430 $3,360
At December 31, 2021, the unadjusted balance in Allowance for Doubtful Accounts us a
credit of $8,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2021. (use
T-accounts.)
(b) Journalize and post to the allowance account these 2022 events and transactions.
1. March 1, a $600 customer balance originating in 2021 is judged uncollectible.
2. May 1, a check for $600 is received from the customer whose account was written
off as uncollectible on March 1.
(c ) Journalize the adjusting entry for bad debts at December 31, 2022, assuming that the
unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,400 and the
aging schedule indicates that total estimated bad debts will be $36,700.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a
(a) Dec 31 Bad Debt Expense 34,400
Allowance for Doubtful Accounts
(a) & (b) Bad Debt Expense Allowance for Doubtfu
12/31 42,400 2021
12/31 Bal. 34,400
2022
3/1
2022
(b)(1) Mar. 1 Bad Debt Expense
Allowance for Doubtful Accounts
(b)(2) May 1 Accounts Receivable
Allowance for Doubtful Accounts
1 Cash
Accounts Receivable
2022
(c ) Dec 31 Bad Debt Expense
Allowance for Doubtful Accounts
After you have completed P8.3A, consider the following additional question.
1. Assume that the unadjusted balance in the Allowance for Doubtful Accounts on December 31, 20
was a credit balance of $1,950 and the aging schedule indicate that total estimated bad debts wil
$37,500. What is the adjusting entry for bad debts on December 31, 2022?
2022
Dec 31 Bad Debt Expense
Allowance for Doubtful Accounts
Bad Debt Expense Allowance for Doubtfu
12/31 37,500 2021
12/31 Bal. 35,550
Number of Days Past Due
61-90 Over 90
$40,000
38,000
$40,000 $38,000
24% 60%
$9,600 $22,800
Accounts us a
er 31, 2021. (use
and transactions.
ed uncollectible.
account was written
2, assuming that the
of $1,400 and the
mber or a formula in cells with a "?" .
34,400
Allowance for Doubtful Accounts
12/31 Bal. 34,400
12/31 8,000
12/31 Bal. 42,400
600 6/1 600
600
600
600
600
600
600
38,100
38,100
ul Accounts on December 31, 2022,
hat total estimated bad debts will be
31, 2022?
35,550
35,550
Allowance for Doubtful Accounts
12/31 Bal. 35,550
12/31 1,950
12/31 Bal. 37,500
P8.3B Journalize transactions related to bad debts
Presented below is an aging schedule for Harper Company at December 31, 2021.
Not Yet Number of Days Past Due
Customer Total Due 1-30 31-60 61-90
Allen $18,000 $12,000 $6,000
Brian 24,000 $24,000
Charles 40,000 $25,000 15,000
Dwight 52,000
Others 196,000 97,000 60,000 39,000
$330,000 $122,000 $87,000 $45,000 $24,000
Estimated percentage
uncollectible 1% 3% 9% 20%
Total estimated
bad debts $33,480 $1,220 $2,610 $4,050 $4,800
At December 31, 2021, the unadjusted balance in Allowance for Doubtful Accounts us a
credit of $9,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2021. (use
T-accounts.)
(b) Journalize and post to the allowance account these 2022 events and transactions.
1. February 1, a $900 customer balance originating in 2021 is judged uncollectible.
2. July 1, a check for $900 is received from the customer whose account was written
off as uncollectible on February 1.
(c ) Journalize the adjusting entry for bad debts at December 31, 2022, assuming that the
unadjusted balance in Allowance for Doubtful Accounts is a debit of $2,800 and the
aging schedule indicates that total estimated bad debts will be $30,600.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a
(a) Dec 31 Bad Debt Expense $24,480
Allowance for Doubtful Accounts $24,480
(a) & (b) Bad Debt Expense Allowance for Doubtful Acc
12/31 33,480 2021
12/31 Bal. 24,480
2022
2/1 900
2022
(b)(1) Feb 1 Bad Debt Expense 900
Allowance for Doubtful Accounts
(b)(2) July 1 Accounts Receivable 900
Allowance for Doubtful Accounts
1 Cash 900
Accounts Receivable
2022
(c ) Dec 31 Bad Debt Expense 33,400
Allowance for Doubtful Accounts
After you have completed P8.3B, consider the following additional question.
1. Assume that the amount judged uncollected changed to $1,250 and that the customer sent in a c
on July 1. Also assume that on December 31, the Allowance for Doubtful Accounts had a debit b
and the aging schedule estimated that total estimated bad debts will be $36,500. Show the impa
on the appropriate journal entries.
2022
2/1 1,250
2022
Feb 1 Bad Debt Expense 1,250
Allowance for Doubtful Accounts
July 1 Accounts Receivable 650
Allowance for Doubtful Accounts
1 Cash 650
Accounts Receivable
2022
Dec 31 Bad Debt Expense 40,000
Allowance for Doubtful Accounts
s Past Due
Over 90
52,000
$52,000
40%
$20,800
as written
ng that the
ormula in cells with a "?" .
ance for Doubtful Accounts
12/31 Bal. 24,480
12/31 9,000
12/31 Bal. 33,480
7/1 900
900
900
900
33,400
e customer sent in a check for $650
ccounts had a debit balance of $3,500
,500. Show the impact of these changes
7/1 650
1,250
650
650
40,000
