172. A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Debit Credit Cash sales……………………………………………….. $188,000 Credit sales……………………………………………… 275,000 Accounts receivable…………………………………….. $76,000 Allowance for doubtful accounts……………………….. 1,000 Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales. 173. 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: Account Age Balance Estimated Uncollectible Percentage Current (not yet due) $620,000 0.5% 1—30 days past due 270,000 2.0% 30—60 days past due 145,000 8.0% 61—90 days past due 55,000 20.0% 90—120 days past due 32,000 50.0% Over 120 days past due 18,000 70.0% Total $1,140,000 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 $41,000 and that accounts receivable written off during the current year totaled $43,200.c. Prepare the adjusting 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.

172. A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Debit Credit Cash sales……………………………………………….. ...

172. A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year:

	Debit	Credit
Cash sales………………………………………………..		$188,000
Credit sales………………………………………………		275,000
Accounts receivable……………………………………..	$76,000
Allowance for doubtful accounts………………………..		1,000

Prepare the adjusting entry to estimate bad debts assuming bad debts are estimated to be 2.5% of credit sales.

173. 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:

Account Age	Balance	Estimated Uncollectible Percentage
Current (not yet due)	$620,000	0.5%
1—30 days past due	270,000	2.0%
30—60 days past due	145,000	8.0%
61—90 days past due	55,000	20.0%
90—120 days past due	32,000	50.0%
Over 120 days past due	18,000	70.0%
Total	$1,140,000

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 $41,000 and that accounts receivable written off during the current year totaled $43,200.
c. Prepare the adjusting 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.

May 15, 2022

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172. A company had the following items and amounts in its unadjusted trial balance as of December 31 of the current year: Debit Credit Cash sales……………………………………………….. ...

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