Question

Aging Method On January 1, 2019, Hungryman, Inc., has the following balances for accounts receivable and allowance for doubtful accounts: Accounts Receivable $1,271,000 Allowance for Doubtful Accounts (a credit balance) 42,000 During 2019, Hungryman had $18,500,000 of credit sales, collected $17,945,000 of accounts receivable, and wrote off $60,000 of accounts receivable as uncollectible. At year end, Hungryman performs an aging of its accounts receivable balance and estimates that $52,000 will be uncollectible. Required: 1. Calculate Hungryman's preadjustment balance in accou

Answer 1

Answer:

Bad debt expense $ 70,000  

Allowance for Uncollectible Accounts  $70,000

Explanation:

• Initial Balance  

Accounts Receivable                             $ 1.271,000  

Allowance for Uncollectible Accounts  $ 42,000

• New Balance after the movements of sales and collection of 2019.

Accounts Receivable                             $ 1.826,000  

Allowance for Uncollectible Accounts  $ 42,000

• When the writte-off of uncollectible accounts

Allowance for Uncollectible Accounts $ 60,000  

Accounts Receivable                $ 60,000

• New balance of accounts after the write-off

Accounts Receivable                             $ 1,766,000  

Allowance for Uncollectible Accounts  $ 18,000  Debit

• Journal Entries due to the estimation of uncollectible

Bad debt expense                                  $ 70,000  

Allowance for Uncollectible Accounts  $70,000

• Final Balance  

Accounts Receivable                             $ 1.766,000  

Allowance for Uncollectible Accounts             $ 52,000