Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 3% of receivables that are not yet due, 12% of receivables that are up to 180 days past due, and 32% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,200 that are up to 180 days past due, and $5,200 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet. Complete this question by entering your answers in the tabs below.
Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 3% of receivables that are not yet due, 12% of receivables that are up to 180 days past due, and 32% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,200 that are up to 180 days past due, and $5,200 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 3% of receivables that are not yet due,
12% of receivables that are up to 180 days past due, and 32% of receivables that are more than 180 days past due will be uncollectible.
The company currently has $50,300 of accounts receivable that are not yet due, $14,200 that are up to 180 days past due, and $5,200
that are more than 180 days past due.
At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $400 (credit) before the end-of-perlod
adjusting entry is made.
Required:
1. Prepare the appropriate bad debt expense adjusting entry for the current year.
2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the
December 31 balance sheet.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare the appropriate bad debt expense adjusting entry for the current year. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
Record the adjusting journal entry for bad debt expense.
Note: Enter debits before credits.
Date
December 31
Record entry
General Journal
Clear entry
Debit
Credit
View general Journal
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