(solution) On December 31, the Jacob, Inc. general ledger contained the

(solution) On December 31, the Jacob, Inc. general ledger contained the

On December 31, the Jacob, Inc. general ledger contained the following balances prior to write-offs and adjustments:

Trade Accounts Receivable

$ 623,450

Allowance for Doubtful Accounts

15,800

(credit)

Net Credit Sales

2,529,000

Before completing an aging analysis to determine the estimated amount uncollectible, Jacob decided to write off $7,500 of an account past due over 360 days.
Aging of the accounts receivable balance after the write-off on December 31 indicated the following:

Estimated

Percentage

Age

Amount

Uncollectible

Under 30 days

$358,900

1.5%

30-90 days

134,000

3.0%

91-180 days

96,000

7.0%

181-360 days

22,700

20.0%

Over 360 days

4,350

60.0%

$615,950

Required:

a.

Prepare the necessary journal entry to record the write-off.

b.

Prepare the adjusting journal entry at December 31 to record Jacob, Inc.’s estimated bad debts assuming that the company uses the aging of accounts receivable method.

c.

What is the net realizable value of accounts receivable on the December 31 balance sheet?

Title of account
a
Allowance for doubtful accounts
Account Receiveables
b
Bad Debts Expense
Allowance for doubtful accounts c
Gross Account Receivables
less Allownace for doubtful accounts
Net…