Question 2A Tenpence Company had a $400 credit balance in Allowance for Doubtful Accounts at...
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Accounting
Question 2A
Tenpence Company had a $400 credit balance in Allowance for Doubtful Accounts at December 31, 2021, before the current year's provision for uncollectible accounts. An ageing of the accounts receivable revealed the following:
Estimated Percentage
Uncollectible
Current Accounts $140,000 1%
130 days past due 15,000 3%
3160 days past due 12,000 6%
6190 days past due 5,000 12%
Over 90 days past due 7,000 30%
Total Accounts Receivable $179,000
Instructions
(a) Prepare the adjusting journal entry on December 31, 2021, to recognize bad debts expense.
(b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $400 debit balance before the current year's provision for uncollectible accounts. Prepare the adjusting journal entry for the current year's provision for uncollectible accounts.
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