Presented below is an aging schedule for Jafar Company.
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At December 31, 2010, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $16,000.
Instructions
(a) Journalize and post the adjusting entry for bad debts at December 31, 2010.
(b) Journalize and post to the allowance account the following events and transactions in the year 2011.
(1) March 1, a $1,900 customer balance originating in 2010 is judged uncollectible.
(2) May 1, a check for $1,900 is received from the customer whose account was written off as uncollectible on March 1.
(c) Journalize the adjusting entry for bad debts on December 31, 2011. Assume that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $2,000, and the aging schedule indicates that total estimated bad debts will be$42,300.