Problem 8-214 [LO 8-2] Adventure Company uses the aging of accounts receivable m

Question

Problem 8-214 [LO 8-2] Adventure Company uses the aging of accounts receivable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old (2) 30-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of receivables of a specific age will not respectively. At December 31, 2016, the unadjusted credit balance in the Allowance for Doubtfiul Accounts was $170. The total Accounts Receivable in each age category were: (1) 1-30 days old, $61,000, (2) 30-90 days old, $19,000, and (3) more than 90 days old, $5,000 be paid as folows (1) 1%, (2) 14%, and (3) 30%. Required: a. Calculate the estimate of uncollectible accounts at December 31, 2016 b. Prepare the appropriate adjusting entry dated December 31,2016. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field., View transaction list Journal entry worksheet Record the adjusting entry on December 31, 2016. Note: Enter debits before credits December 31, 2016 Clear entry View general journal Record entry

Explanation / Answer

Accounts Age of accounts receivable % uncollectible Uncollectible amount 1-30 days past due 61000 1% 610 31-90 days past due 19000 14% 2660 over 90 days past dues 5000 30% 1500 85000 4770 Total estimated uncollectible 4770 Total estimated uncollectible 4770 Less Beginnning uncollectible balance 170 Bad debt expense 4600 31-Dec-16 Bad debt expense 4600              Allowance for uncollectible accounts 4600

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---