P8-3A Journalize transactions related to bad debts
Presented below is an aging schedule for Bryan Company.
Not Yet
Total Due 1-30 31-60 61-90 Over 90
Aneesh $24,000 $9,000 $15,000
Bird 30,000 $30,000
Cope 50,000 5,000 5,000 $40,000
DeSpears 38,000 38,000
Others 120,000 72,000 35,000 13,000
$262,000 $107,000 $49,000 $28,000 $40,000 $38,000
Estimated percentage
uncollectible 3% 7% 12% 24% 60%
Total estimated
bad debts $42,400 $3,210 $3,430 $3,360 $9,600 $22,800
At December 31, 2016, the unadjusted balance in Allowance for Doubtful Accounts us a
credit of $8,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2016. (use
T-accounts.)
(b) Journalize and post to the allowance account these 2017 events and transactions.
1. March 1, a $600 customer balance originating in 2016 is judged uncollectible.
2. May 1, a check for $600 is received from the customer whose account was written
off as uncollectible on March 1.
(c ) Journalize the adjusting entry for bad debts at December 31, 2017, assuming that the
unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,400 and the
aging schedule indicates that total estimated bad debts will be $36,700.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .
(a) Dec 31 Value
Value
(a) & (b)
12/31 Value 2016 12/31 Bal. Value
12/31 Bal. ? 12/31 Value
12/31 Bal. ?
2017
3/1 Value 6/1 Value
(b)(1) Mar. 1 Value
Value
(b)(2) May 1 Value
Value
1 Value
Value
Number of Days Past Due
Customer
Bad Debt Expense
Allowance for Doubtful Accounts
Account
2017
Account
Account
Account
Account
Account
Account
Account
(c ) Dec 31 Value
Value
After you have completed P8-3A, consider the following additional question.
1. Assume that the unadjusted balance in the Allowance for Doubtful Accounts on December 31, 2017
was a credit balance of $1,950 and the aging schedule indicate that total estimated bad debts will be
$37,500. What is the adjusting entry for bad debts on December 31, 2017?
2017
Account
Account
Allowance for Doubtful Accounts
Accounts Receivable
2017
Bad Debt Expense
P8-3A Solution
(a) Dec 31 34,400
(a) & (b)
(b)(1) Mar. 1 600
600
Bad Debt Expense
Bad Debt Expense
Allowance for Doubtful Accounts
2017
Allowance for Doubtful Accounts
Accounts Receivable
Allowance for Doubtful Accounts
1. Assume that the unadjusted balance in the Allowance for Doubtful Accounts on December 31, 2017
was a credit balance of $1,950 and the aging schedule indicate that total estimated bad debts will be
$37,500. What is the adjusting entry for bad debts on December 31, 2017?
(a) Dec 31 34,400
Bad Debt Expense
Allowance for Doubtful Accounts
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable
2017
(a) & (b)
12/31 34,400 2016 12/31 Bal. 8,000
12/31 Bal. 34,400 12/31 34,400
(b)(1) Mar. 1 600
600
Allowance for Doubtful Accounts
Bad Debt Expense
Bad Debt Expense
Allowance for Doubtful Accounts
2017
Accounts Receivable
P8-3B Journalize transactions related to bad debts
Presented below is an aging schedule for Harper Company.
Not Yet
Total Due 1-30 31-60 61-90 Over 90
Allen $18,000 $12,000 $6,000
Brian 24,000 $24,000
Charles 40,000 $25,000 15,000
Dwight 52,000 52,000
Others 196,000 97,000 60,000 39,000
$330,000 $122,000 $87,000 $45,000 $24,000 $52,000
Estimated percentage
uncollectible 1% 3% 9% 20% 40%
Total estimated
bad debts $33,480 $1,220 $2,610 $4,050 $4,800 $20,800
At December 31, 2013, the unadjusted balance in Allowance for Doubtful Accounts us a
credit of $9,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2013. (use
T-accounts.)
(b) Journalize and post to the allowance account these 2014 events and transactions.
1. February 1, a $900 customer balance originating in 2013 is judged uncollectible.
2. July 1, a check for $900 is received from the customer whose account was written
off as uncollectible on February 1.
(c ) Journalize the adjusting entry for bad debts at December 31, 2014, assuming that the
unadjusted balance in Allowance for Doubtful Accounts is a debit of $2,800 and the
aging schedule indicates that total estimated bad debts will be $30,600.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .
(a) Dec 31 Account Value
Account Value
(a) & (b)
12/31 Value 2013 12/31 Bal. Value
12/31 Bal. ? 12/31 Value
12/31 Bal. ?
2014
2/1 Value 7/1 Value
(b)(1) Feb.. 1 Value
Value
(b)(2) July 1 Value
Value
1 Value
Value
Customer
Number of Days Past Due
Bad Debt Expense
Allowance for Doubtful Accounts
2014
Account
Account
Account
Account
Account
Account
(c ) Dec 31 Value
Value
After you have completed P8-3B, consider the following additional question.
1. Assume that the amount judged uncollected changed to $1,250 and that the customer sent in a check for $650
on July 1. Also assume that on December 31, the Allowance for Doubtful Accounts had a debit balance of $3,500
and the aging schedule estimated that total estimated bad debts will be $36,500. Show the impact of these changes
on the appropriate journal entries.
2014
Account
Account
Allowance for Doubtful Accounts
Accounts Receivable
Allowance for Doubtful Accounts
Accounts Receivable
Bad Debt Expense
P8-3B Solution
(a) Dec 31 Bad Debt Expense 24,480
(a) & (b)
12/31 24,480 2013 12/31 Bal. 9,000
(b)(1) Feb. 1 900
900
Bad Debt Expense
Allowance for Doubtful Accounts
2014
Allowance for Doubtful Accounts
Accounts Receivable
P8-3B Solution to additional question
1. Assume that the amount judged uncollected changed to $1,250 and that the customer sent in a check for $650
on July 1. Also assume that on December 31, the Allowance for Doubtful Accounts had a debit balance of $3,500
and the aging schedule estimated that total estimated bad debts will be $36,500. Show the impact of these changes
on the appropriate journal entries.
(a) Dec 31 Bad Debt Expense 24,480
(a) & (b)
12/31 24,480 2013
12/31 Bal.
9,000
12/31 Bal.
12/31 Bal.
Allowance for Doubtful Accounts
Accounts Receivable
2014
(b)(1) Feb. 1 1,250
1,250
Bad Debt Expense
Allowance for Doubtful Accounts
2014
Allowance for Doubtful Accounts
Accounts Receivable