Reference no: EM132489158

Other pertinent facts include the following:

1. SCC's balance in its "allowance for doubtful accounts" account on January 1, 20X7, was a $4,600 credit.
2. On March 31, 20X7, SCC unexpectedly collected a $1,950 accounts receivable due from KML Corp. that it wrote off in 20X6.
3. During the year, SCC wrote off a total of $3,800 in uncollectable accounts.
4. SCC uses a balance sheet approach (aging method) to estimate its uncollectable accounts. Based on historical experience, SCC provides for bad debts as follows:

Aging period Days outstanding                                      0-30               31-60                61-90         > 91             Total

Historical percent loss                                           1%                    5%                   10%             30%

Account receivables aging report Dec 31,20x7       636,800            96,000              3,850             13,600           750,250

Question a) what are the journal entries required during the year and at year end to properly reflect SCC's accounting for its bad debt expense/allowance for doubtful accounts. Ensure that your journal entry(ies) includes an explanation as to the nature of the transaction.

Question b) Use a T-account to reconcile the change in the opening (January 1, 20X7) and closing (December 31, 20X7) balances in the allowance for doubtful accounts. Ensure that the reconciliation includes all the journal entries you prepared in part (a)