Debit Company Uses the Aging of Accounts Receivable Method to Estimate

question 130

Essay

Debit Company uses the aging of accounts receivable method to estimate uncollectible accounts. The company started the year with accounts receivable of $85,000 and an allowance for uncollectible accounts of $10,000. During the year, the company had credit sales of $300,000 and cash collections on account of $325,000. It also wrote off uncollectible accounts receivable of $7,000. At the end of the year, an aging of accounts receivable indicated the company will not collect $8,000 of its accounts receivable.
1. Journalize the credit sales, cash collections, write-off, and uncollectible accounts expense for the year.
2. Create a T account for the allowance for uncollectible accounts, post the necessary entries, and compute an ending account balance. The T account should support the journal entry for uncollectible accounts expense.

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Definitions:

Social Sustainability

The practice of creating and managing systems or processes in a way that supports the well-being of current and future generations.

Supplier Evaluation

The process of assessing and reviewing a supplier's performance, capabilities, and compliance to contractual agreements and quality standards, typically for the purpose of improving business transactions and relationships.

Traditional Criteria

Conventional standards or benchmarks that are used to evaluate or judge something, often based on historical data or long-standing practices.

Scope of Operations

The range or extent of the activities and processes that a business or organization engages in or plans to undertake.