Kwikdeal com uses the allowance method to estimate

uncollectible
Kwikdeal.com uses the allowance method to estimate uncollectible accounts receivable. The
company produced the following aging of the accounts receivable at year end.Instructions(a)
Calculate the total estimated bad debts based on the above information.(b) Prepare the year-
end adjusting journal entry to record the bad debts using the aged uncollectible accounts
receivable determined in (a). Assume the unadjusted balance in Allowance for Doubtful
Accounts is a $4,000 debit.(c) Of the above accounts, $5,000 is determined to be specifically
uncollectible. Prepare the journal entry to write off the uncollectible account.(d) The company
collects $5,000 subsequently on a specific account that had previously been determined to be
uncollectible in (c). Prepare the journal entry(ies) necessary to restore the account and record
the cash collection.(e) Comment on how your answers to (a)–(d) would change if Kwikdeal.com
used 3% of total accounts receivable, rather than aging the accounts receivable. What are the
advantages to the company of aging the accounts receivable rather than applying a percentage
to total accountsreceivable?
View Solution:
Kwikdeal com uses the allowance method to estimate uncollectible
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