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1 April, 12:28

The following summarizes the aging of accounts receivable for Johnston Supplies, Inc. as of July 31, 2019: Number of Days Unpaid Total Accounts Receivable Historical % Uncollectible Not yet due $ 127,400 3 % 1-30 days past due 90,100 13 % 31-60 days past due 54,500 19 % Over 60 days past due 32,700 33 % Required: The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $29,217 on July 31, 2019. Prepare the required adjusting entry to record Bad Debt Expense for the year. Johnston Supplies, Inc. writes off $3,171 of uncollectible accounts on August 15, 2019. Prepare the required adjusting entry to record the write-off. Use a T-account to determine the account balance in the Allowance for Doubtful Accounts on August 15, 2019.

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  1. 1 April, 16:23
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    bad debt expense 7,464 debit

    allowance for doubtful accounts 7,464 credit

    --to record year-end adjustment for bad debt expense--

    allowance for doubtful accounts 3,171 debit

    accounts receivables 3,171 credit

    --to record write-off of a custoemr account--

    Explanation:

    We multiply each balance by their expected uncollectible amount:

    Date / / Amount / / Expected / / uncollectible

    not due 127400 0.03 3,822

    up to 30 90100 0.13 11,713

    up to 60 54500 0.19 10,355

    above 61 32700 0.33 10,791

    Total 36,681

    Allowance balance 29,217

    Difference 36,681 - 29,217 = 7,464

    The write-off will decrease both, account recievable and the allowance

    Allowance for doubtful accounts

    Debit Credit

    36,681

    3,171

    Balance 33,510
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