On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $15,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 840,000 Not yet due 1.30 % 336,000 1 to 30 days past due 2.05 67,200 31 to 60 days past due 6.55 33,600 61 to 90 days past due 33.00 13,440 Over 90 days past due 69.00 2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to

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Business

Selah

6 May, 06:04

On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $15,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 840,000 Not yet due 1.30 % 336,000 1 to 30 days past due 2.05 67,200 31 to 60 days past due 6.55 33,600 61 to 90 days past due 33.00 13,440 Over 90 days past due 69.00 2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to

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Seamus Mathis · Answer 1

31st December

Dr Bad Debt Expenses 27,071

Cr Allowance for Bad Debt 27,071

(to record the Bad debt expense)

Explanation:

For this question, we need to calculate the balance for Allowance for Doubtful Account at 31st December first.

With the given Account Receivable balances classify by Aging and its Expected Uncollectible Percentage, we have Allowance for Doubtful Account calculated as below:

840,000 x 1.30% + 336,000 x 2.05% + 67,200 x 6.55% + 33,600 x 33% + 13,440 x 69% = $42,571

=> Allowance for Bad Debt needs to be adjusted up (Cr) for $27,071 (42,571 - 15,500) and Bad Debt expense needs to be recorded at the same amount (Dr)