Reporting Uncollectible Accounts and Accounts Receivable LaFond Company analyzes its accounts receivable at December 31, 2016, and arrives at the aged categories below along with the percentages that are estimated as uncollectible.
Age Group Accounts Receivable Estimated Loss %
Current (not past due) $250,000 0.5%
1-30 days past due 90,000 1.0
31-60 days past due 20,000 2.0
61-120 days past due 11,000 5.0
121-180 days past due 6,000 10.0
Over 180 days past due 4,000 25.0
Total accounts receivable 381,000
At the beginning of the fourth quarter of 2016, there was a credit balance of $4,350 in the Allowance for Uncollectible Accounts. During the fourth quarter, LaFond Company wrote off $3,830 in receivables as uncollectible.
A. What amount of bad debts expense will LaFond report for 2016?
B. What is the balance of accounts receivable that it reports on its December 31, 2016, balance sheet? $376,300
C. Set up T-accounts for both Bad Debt Expense and for Allowance for Uncollectible Accounts. Enter any beginning balances and effects from the information above (including your results from parts a and b).
Bad Debts Expense Allowance for Doubtful Accounts
A) 4,700 0 Bag 0 4,350
Bal.
Balance 4,700 0 Write-off 3,850

Solution :

                                                         Account          Estimated           Estimated          

                                                         receivable          loss%               bad debts

Current                                              250,000              0.5                     1250

1-30 days of past due                       90,000                 1.0                       900

31-60 days of past due                     20,000                  2.0                     400

61-120 days of past due                    11,000                    5.0                      550

121-180 days of past due                   6,000                    10.0                     600

Over 180 days of past due                4,000                    25.0                   1000

Total account receivable                 381,000                                             4700

a). The amount for the bad debts expense is = 4700 - (4350 - 3830)

                                                                          = 4180

b). Balance in the accounts receivable

     Accounts receivable                                              =   381,000

     Less : allowance for bad debts                             =      - 4180

     Net realizable value of the accounts receivable =  376,820

c).      Bad debts expense

     a).           4180

     Balance: 4180

The allowance for un-collectible account

Beg. Bal   :       4350    

write off   :        3830

a).                     4180

Balance            4700                      

answer; ///liability;