The following information was taken from the accounts receivable records of Monty Corporation as at December 31, 2020: Outstanding Balance Percentage Estimated to be Uncollectible 0 – 30 days outstanding $156,000 0.5% 31 – 60 days outstanding 65,400 2.5% 61 – 90 days outstanding 40,000 4.0% 91 – 120 days outstanding 20,800 6.5% Over 120 days outstanding 5,100 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,280 prior to the adjustment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $4,010 prior to the adjustment. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit List of Accounts
The following information was taken from the accounts receivable records of Monty Corporation as at December 31, 2020: Outstanding Balance Percentage Estimated to be Uncollectible 0 – 30 days outstanding $156,000 0.5% 31 – 60 days outstanding 65,400 2.5% 61 – 90 days outstanding 40,000 4.0% 91 – 120 days outstanding 20,800 6.5% Over 120 days outstanding 5,100 10.0% (a) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,280 prior to the adjustment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $4,010 prior to the adjustment. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit List of Accounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Question
The following information was taken from the accounts receivable records of Monty Corporation as at December 31, 2020:
(a) Prepare the year-endadjusting entry for bad debt expense, assuming allowance for doubtful accounts had a credit balance of $1,280 prior to the adjustment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
(b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $4,010 prior to the adjustment. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| Outstanding Balance |
Percentage Estimated to be Uncollectible |
|||
| 0 – 30 days outstanding | $156,000 | 0.5% | ||
| 31 – 60 days outstanding | 65,400 | 2.5% | ||
| 61 – 90 days outstanding | 40,000 | 4.0% | ||
| 91 – 120 days outstanding | 20,800 | 6.5% | ||
| Over 120 days outstanding | 5,100 | 10.0% |
(a) Prepare the year-end
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Account Titles and Explanation
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Debit
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Credit
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(b) Prepare the year-end adjusting entry for bad debt expense, assuming allowance for doubtful accounts had a debit balance of $4,010 prior to the adjustment. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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Account Titles and Explanation
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Debit
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Credit
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List of Accounts
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