Uncollectible Accounts Receivables for XYZ (Coursework Sample)

Uncollectible Accounts Receivables for XYZ
Student’s Name
Institutional Affiliation
Course Name + Code
Instructor's Name
Date
Uncollectible Accounts Receivables for XYZ
1 Percentage of bad debts = (bad debts /total debts)*100
The company’s total debt is $375,000.
Similarly, the company has debts with a different number of days outstanding. The debt collection rate for $220,000 is 1%, while the debts should be collected within 30 days.
1/100*220,000
$2,200
The percentage rate for the debts to be collected between 31-60 days is 4% while the amount of debt = $90,000
4/100*90,000
$3,600
61-90 days
Accounts receivables = $30,000
Percent uncollectible = 5%
Estimated bad debts 5/100*40,000
$1,500
91-120 days
Accounts receivables = 20,000
Percent uncollectible = 9%
9/100*20,000
$1,800
Over 120 days
Accounts receivables = $15,000
Percent uncollectible = 20%
20/100*15000
$3000
Total estimated bad debts = (2,200 + 3,600+ 1500+ 1800+ 3000)
Total estimated bad debts is $12,100
2. Journal entry
Dr. Bad debt expense $9,100
Cr. Bad and doubtful debts $9,100
(Being a record of bad and doubtful debts assuming that the current bad debt allowance is $3000)