A Company Uses the Aging of Accounts Receivable Method to Estimate

question 19

Essay

A company uses the aging of accounts receivable method to estimate its bad debts expense. On December 31 of the current year an aging analysis of accounts receivable revealed the following:

Required:
a. Calculate the amount of the Allowance for Doubtful Accounts that should be reported on the current year-end balance sheet
b. Calculate the amount of the Bad Debts Expense that should be reported on the current year's income statement, assuming that the balance of the Allowance for Doubtful Accounts on January 1 of the current year was $44,000 and that accounts receivable written off during the current year totaled $49,200
c. Prepare the adjusting journal entry to record bad debts expense on December 31 of the current year
d. Show how Accounts Receivable will appear on the current year-end balance sheet as of December 31

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Definitions:

Pain

The sensation that warns an individual of damage to the body.

Temperature

A measure of the degree of internal heat energy in a body or environment, influencing physical states and reactions.

Motor Nerves

Nerves that transmit signals from the central nervous system to muscles, thus facilitating movement.

Somatic Nervous System

A part of the peripheral nervous system associated with the voluntary control of body movements through the action of skeletal muscles.