Pessimist Incorporated had credit sales totalling $4,900,000 and $5,100,000 for the years ended December 31,...
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Pessimist Incorporated had credit sales totalling $4,900,000 and $5,100,000 for the years ended December 31, 2018 and December 31 2019. respectively. Information on trade accounts receivable for the company is presented below: Days outstanding Balance in accounts receivable December 31, 2018 0-30 400,000 30-60 150,000 61-90 40,000 Over 90 10,000 Balance in accounts receivable December 31, 2019 440,000 160,000 30,000 20,000 % of receivables estimated to be uncollectible 0.5% 1% 2% 5% The credit balance in the allowance for doubtful accounts as of January 1. addition, you learn that the company wrote off specific accou vu leurn that the company wrote off specific accounts of $6,500 during 2018 and ma bad debts expense was $8,000 in 2019. Required: (a) Calculate the bad debts expense for 2018. (4 marks) (b) Calculate the amount of receivables that were written off during 2019. (4 marks) (c) Prepare the journal entry to record bad debts expense for 2018. (2 marks)
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