A summary of Klugman Company's December 31, 2024, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group: Age Group Amount % 0–60 days $ 70,000 0.5 61–90 days 27,000 1.0 91–120 days 4,000 10.0 Over 120 days 1,100 50.0 The allowance for uncollectible accounts had a balance of $1,500 on January 1, 2024. During the year, bad debts of $850 were written off. Required: Prepare all journal entries for 2024 with respect to bad debts and the allowance for uncollectible accounts. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
A summary of Klugman Company's December 31, 2024, accounts receivable aging schedule is presented below along with the estimated percent uncollectible for each age group:
| Age Group | Amount | % |
|---|---|---|
| 0–60 days | $ 70,000 | 0.5 |
| 61–90 days | 27,000 | 1.0 |
| 91–120 days | 4,000 | 10.0 |
| Over 120 days | 1,100 | 50.0 |
The allowance for uncollectible accounts had a balance of $1,500 on January 1, 2024. During the year,
Required:
Prepare all journal entries for 2024 with respect to bad debts and the allowance for uncollectible accounts.
Note: If no entry is required for a transaction/event, select "No
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