On December 31, 2011, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:

Accounts receivable: $25,000 debit balance
Allowance for doubtful accounts: $200 credit balance
Sales revenue (all sales on credit): $4

Present the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions:A. An aging of accounts receivable is completed. It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible. B. It is estimated that 1% of credit sales for the year will prove to be uncollectible.
C. Assume the same information presented above except that prior to adjustment, the Allowance for Doubtful Accounts had a debit balance of $200 rather than a credit balance of $200.

Answer

Colonial corporation

Journal entries

A. $2,150 uncollectible of the year end Accounts receivable balance.

Debit Uncollectible Account with $2,150

Credit Account Receivable Account with $2,150

(Being aged debt that is uncollectible at year end)

Debit Allowance for doubtful debt with $200

Credit Uncollectible debt Account with $200

(Being reversal of allowance for doubtful debt no longer required after ageing review of debt)

B. 1% of credit sales is uncollectible

1% of $400,000 = $4,000

Debit Uncollectible Account with $4,000

Credit Account Receivable Account with $4,000

(Being 1% of credit sales that is uncollectible at year end)

Debit Allowance for doubtful debt with $200

Credit Uncollectible debt Account with $200

(Being reversal of allowance for doubtful debt no longer required after ageing review of debt)

C. (assuming a above but allowance for doubtful debt is a debit balance of $200)

i. $2,150 uncollectible of the year end Accounts receivable balance.

Debit Uncollectible Account with $2,150

Credit Account Receivable Account with $2,150

(Being aged debt that is uncollectible at year end)

ii. 1% of credit sales is uncollectible

1% of $400,000 = $4,000

Debit Uncollectible Account with $4,000

Credit Account Receivable Account with $4,000

(Being 1% of credit sales that is uncollectible at year end)

The debit receivable balance could relate to debts once written off but now being paid.

(75years ,i believe is the correct answer.good luck