Question

Question 4 From inception of operations to December 31, 2017, Blue Corporation provided for collectible s ce n der the e thod. The provide recorded and also customers with different characteristics. Badet witten off were charged to the wonde con recoveries of bad debts previously written off were credited to the allowance account, and never-end adjustments to the allowance account were made. Blue's usual credit terms are net 30 days. The balance in Allowance for Doubt Accounts was $14.200 anuary 1, 2017. During 2017, credit tot $9.170300, the provision for doutul accounts was determined to be $91.700 $91,703 ot bad debts were written of and recoveries of accounts previously written of amounted to $19,570, Blue installed a computer system in November 2017 and an ing of account receivable was prepared for the first time as of December 31, 2017. A summary of the aging is follow Clavcation by Month of Sale Estimated collectible Balance in Each Category 51.210.000 8,300 November December 2017 July October January Prior to 1// 157,30 6.900 1 reches to 2017, n 2017. The Based on the review of collectibly of the account balance in the prior to 11/12 ging ordt uncollectie estimate piles to the remaining 99.800 is the face with the year and Dec dob i ted by the year s .500 were written o da h December

Answer 1

Blue Corporation Analysis of Changes in the Allowance for Doubtful Accounts For the Year Ended December 31, 2017 Balance at January 1, 2017 Provision for doubtful accounts Recovery in 2017 of bad debts written off previously 144200 91703 19570 255473 149203 106270 192111 298381 Computation of Allowance for Doubtful Accounts at December 31, 2017 Aging Doubtful Category Balance % Accounts Nov-Dec 2017 1210000 2% 24200 July-Oct 678300 11% 74613 Jan-Jun 441300 26% 114738 Prior to 1/1/17 99800 85% 84830 298381 (a) $157,300 - $57,500 Deduct write-offs for 2017 ($91,703 + $57,500) Balance at December 31, 2017 before change in accounting estimate Increase due to change in accounting estimate during 2017 ($298,381 - $106,270) Balance at December 31, 2017 adjusted (Schedule 1) Bad Debt Expense a/c Dr. 192111 To Allowance for Doubtful Accounts 192111 (To increase the allowance for doubtful accounts at December 31, 2017, resulting from a change in accounting estimate)