Reference no: EM132571237

Question - Minquo Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2019, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following:

Estimated Percentage Uncollectible

Current Accounts $120,000 1%

1-30 days past due 20,000 3%

31-60 days past due 10,000 6%

61-90 days past due 10,000 12%

Over 90 days past due 8,000 30%

Total Accounts Receivable $168,000

Instructions -

(a) Prepare the adjusting entry on December 31, 2019, to recognize bad debts expense.

(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $500 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting entry for the current year's provision for uncollectible accounts.

(c) Assume that the company has a policy of providing for bad debts at the rate of 1% of sales, that sales for 2019 were $550,000, and that Allowance for Doubtful Accounts had a $650 credit balance before adjustment. Prepare the adjusting entry for the current year's provision for bad debts.

(d) 30 April, 2020, the company decide to write-off $1,000 uncollectible debt of some customer due to Covid-19 pandemic. Journalize the transaction.

(e) 10 June, 2020, some customers paid $700 the debt that written-off by the company at 30 April 2020. Journalize the transaction.