Minquo Company had a $700 credit balance in Allowance for Doubtful Accounts at D
ID: 2558722 • Letter: M
Question
Minquo Company had a $700 credit balance in Allowance for Doubtful Accounts at December 31, 2012, before the current year's provision for uncollectible accounts. An aging of the accounts receivable revealed the following Estimated Percentage Uncollectible Current Accounts 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Total Accounts Receivable $120,000 20,000 10,000 10,000 8,000 $168000 3% 6% 12% 30% Instructions (a) Prepare the adjusting entry on December 31,2012, to recognize bad debts expense (b) Assume the same facts as above except that the Allowance for Doubtful Accounts account had a S500 credit balance before the current year's provisioh for uncollectible accounts Prepare the adjusting entry for the current ????s provision for uncollectible accountsExplanation / Answer
Calculate estimated uncollectible amount :
a) Adjusting entry :
b) Adjusting entry :
Days Account receivvable % uncollectible Uncollectible amount Current accounts 120000 1% 1200 1-30 days 20000 3% 600 31-60 days 10000 6% 600 61-90 days 10000 12% 1200 Over 90 days 8000 30% 2400 Total 168000 6000