On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $15,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable Age of Accounts Receivable Expected Percent Uncollectible $ 840,000 Not yet due 1.30 % 336,000 1 to 30 days past due 2.05 67,200 31 to 60 days past due 6.55 33,600 61 to 90 days past due 33.00 13,440 Over 90 days past due 69.00 2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to

With the given Account Receivable balances classify by Aging and its Expected Uncollectible Percentage, we have Allowance for Doubtful Account calculated as below:

840,000 x 1.30% + 336,000 x 2.05% + 67,200 x 6.55% + 33,600 x 33% + 13,440 x 69% = $42,571

=> Allowance for Bad Debt needs to be adjusted up (Cr) for $27,071 ( 42,571 - 15,500) and Bad Debt expense needs to be recorded at the same amount (Dr)

Tundexi Tundexi · Answer 2 · 2022-03-24T12:52:54+01:00

The adjusting entry to record bad debts expense at December 31 Includes a Debit to Bad Debt Expenses for $27,071 and Credit to Allowance for Bad Debt for $27,071.

With respect to Account Receivable balances classified by Aging and its Expected Uncollectible Percentage in the question, the Allowance for Doubtful Account is as follows:

Allowance for Doubtful Account = ($840,000 x 1.30%) + ($336,000 x 2.05%) + ($67,200 x 6.55%) + ($33,600 x 33%) + ($13,440 x 69%)

Allowance for Doubtful Account = $42,571

Allowance for Bad Debt = Allowance for Doubtful Account - Unadjusted credit balance

Allowance for Bad Debt = 42,571 - 15,500

Allowance for Bad Debt = $27,071

In conclusion, the entry includes Debit to Bad Debt Expenses for $27,071 and Credit to Allowance for Bad Debt for $27,071.