Reference no: EM132947876

Question -

Q1. Moore Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2020, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following

Estimated Percentage Uncollectible

Current Accounts $170,000 1%

1-30 days past due 15,000 3%

31-60 days past due 12,000 6%

61-90 days past due 5,000 12%

Over 90 days past due 9,000 25%

Total Accounts Receivable $211,000

(a) Prepare the adjusting entry on December 31, 2020, 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.

Q2. The December 31, 2019 balance sheet of Sauder Company had Accounts Receivable of £500,000 and a credit balance in Allowance for Doubtful Accounts of £33,000. During 2020, the following transactions occurred: sales on account £1,300,000; sales returns and allowances, £50,000; collections from customers, £1,215,000; accounts written off £35,000; previously written off accounts of £5,000 were collected.

(a) Journalize the 2020 transactions.

(b) If the company uses the percentage-of-receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of accounts receivable, what is the adjusting entry at December 31, 2020?