Question

The company estimates future uncollectible accounts. The company determines $23,000 of accounts receivable on January 31 are past due, and 30% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.) Record bad debts at the end of January.

Answer 1

Answer:

Bad debt expense = ($23,000 * 30% + $23,000 * 70% * 3%)

Bad debt expense = $6,900 + $483

Bad debt expense = $7,383

                            Journal entry  

Date         General Journal                   Debit         Credit

Jan 31    Bad debt expense                 $7,383

             Allowance for uncollectible-                     $7,383

             accounts.