Reference no: EM132831117
Problem - Gable Incorporated provides legal services. During 2021, the company provides services of $500,000 on account. Of this amount, $70,000 remains uncollected at the end of the year. An aging schedule as of December 31, 2021, is provided below.
|
Age Group
|
Amount Receivable
|
Estimated Percent uncollectible
|
|
Not yet due
|
$40,000
|
5%
|
|
0-30 days past due
|
19,000
|
10%
|
|
31-60 days past due
|
9,000
|
20%
|
|
More than 60 days past due
|
6,000
|
40%
|
|
Total
|
$74,000
|
|
Required -
1. Calculate the allowance for uncollectible accounts.
2. Record the December 31, 2021 adjustment, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $500 (debit).
3. On April 3, 2022, a customer's account balance of $600 is written off as uncollectible. Record the write-off.
4. On July 17, 2022, the customer whose account was written off in Requirement 3 unexpectedly pays $200 of the amount but does not expect to pay any additional amounts. Record the cash collection.