50On January 1, Wolfie’s Supply sold $222 worth of goods to customer Abe Smith on account. For several months Wolfie’s tried unsuccessfully to collect from the customer, and finally decided to write...

50On January 1, Wolfie’s Supply sold $222 worth of goods to customer Abe Smith on account. For several months Wolfie’s tried unsuccessfully to collect from the customer, and finally decided to write off the account. (Wolfie’s uses the allowance method.)

Later in the year, however, the customer came in to Wolfie’s, apologized for the late payment and handed over a check for $222. To properly record the recovery of an account previously written off, two journal entries are needed—one to restore the receivable previously written off, and one to record the cash receipt. Please show the second of these two entries.

51A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the percent-of-sales method to account for uncollectible account expense, and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense.

Please show the journal entry required to record Uncollectible account expense at the end of the year.

3.2-52A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the aging-of-accounts method to account for uncollectible account expense, and has calculated an amount of $200 as their estimate of uncollectible amounts at year-end. Please show the journal entry required to record Uncollectible account expense at the end of the year.

53Perry Materials Supply uses the aging-of-accounts method to account for uncollectible accounts. At the

end of the year, the balance in Accounts receivable was $146,000 and Perry prepared the following aging schedule.

Based on past history, Perry uses 2% for current receivables (1-30 days), 10% for 31-60 days, 20% for 61-90 days, and 40% for over 90 days. Please complete the schedule and calculate the estimated amount of Uncollectible accounts.

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