Boulder View Corporation accounts for uncollectible accounts receivable using the allowance method. As of December 31, 2002, the credit balance in Allowance for Bad Debts was $130,000. During 2003, credit sales totaled $10,000,000, $90,000 of accounts receivable were written off as uncollectible, and recoveries of accounts previously written off amounted to $15,000. An agingof accounts receivable at December 31, 2003, showed the following:
|
Classification of Receivable |
Accounts Receivable Balance as of 31 Dec 03 |
Percentage Estimated Uncollectible |
|
|
Current |
$1,140,000 |
2% |
|
|
1 30 days past due |
600,000 |
10 |
|
|
31 60 days past due |
400,000 |
23 |
|
|
Over 60 days past due . |
120,000 |
75 |
|
|
$2,260,000 |
|||
Required
1. Prepare the journal entry to record bad debt expense for 2003, assuming bad debts are estimated using the aging of receivables method.
2. Record journal entries to account for the actual write off of $90,000 uncollectible accounts receivable and the collection of $15,000 in receivables that had previously been written off.