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Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts...

Wall Inc. uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end.
Number of Days Outstanding
Total 0-30 31-60 61-90 91-120 Over 120
Accounts receivable $375,000 $220,000 $90,000 $40,000 $10,000 $15,000
% uncollectible 1% 4% 5% 8% 10%
Calculate the total estimated bad debts based on the above information.
Number of Days Outstanding
Total 0-30 31-60 61-90 91-120 Over 120
Accounts receivable $375,000 $220,000 $90,000 $40,000 $10,000 $15,00
% uncollectible 1% 4% 5% 8% 10%
Estimated bad debts $ $ $ $ $ $
Prepare the year-end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in previous question. Assume the current balance in Allowance
for Doubtful Accounts is a $8,000 debit.
Description/Account Debit Credit
Of the above accounts, $5,000 is determined to be specifically uncollectible. Prepare the journal entry to write off the uncollectible account.
Description/Account Debit Credit
The company collects $5,000 subsequently on a specific account that had previously been determined to be uncollectible in previous question. Prepare the journal entry(ies) necessary to restore
the account and record the cash collection.
Description/Account Debit Credit
Accounts receivable
Comment on how your answers to (a)-(d) would change if Wall Inc. 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 accounts receivable?

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