Redbud Co. sells products to customers on account and uses the allowance method to account for uncollectible accounts. The company records an adjusting entry for estimated uncollectible accounts at year-end. On the Dec. 31, 2020, balance sheet, Redbud reported the following: Current assets Accounts receivable, net of allowance for uncollectible accounts of $40,000 $490,000 In 2021, sales on account (credit sales) were $1,778,000; cash collected on account from customers was $1,830,000; uncollectible accounts of $34,000 were written off in 2021. 1. Record the journal entry to write-off uncollectible accounts in 2021. 2. Determine the: a. Dec. 31, 2021 balance in Accounts receivable. b. balance in the Allowance account before 2021 bad debt expense is recorded. 3. Assume Redbud estimates 3% of sales on account are uncollectible. a. Record the Dec. 31, 2021, adjusting entry for bad debts. b. Determine the amount of net accounts receivable reported on the Dec. 31, 2021, balance sheet. 4. Assume Redbud estimates 10% of the year-end balance in accounts receivable is uncollectible. a. Record the Dec. 31, 2021, adjusting entry for bad debts. b. Determine the amount of net accounts receivable reported on the Dec. 31, 2021, balance sheet. 5. Assume Redbud estimates uncollectible accounts with an aging schedule of year-end accounts receivable. An analysis of year-end receivables shows the following: Age group % of year-end receivables % estimated uncollectible 0-60 days 75% 5% 61-90 days 15% 10% Over 90 days 10% 40% a. Record the Dec. 31, 2021, adjusting entry for bad debts. b. Determine the amount of net accounts receivable reported on the Dec. 31, 2021, balance sheet.
