(a) The aging of Torme Designs\' accounts receivable is shown below. Calculate t
ID: 2402415 • Letter: #
Question
(a) The aging of Torme Designs' accounts receivable is shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible.
?
Est. Uncollectible Accts.
Balance
Percentage
Amount
850,000
3.50%
47,500
5.00%
21,750
10.00%
11,250
20.00%
5,065
30.00%
2,500
50.00%
1,145
95.00%
939,210
?
(b) If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for
the bad debt expense for the year.
Est. Uncollectible Accts.
Age IntervalBalance
Percentage
Amount
Not past due850,000
3.50%
1-30 days past due47,500
5.00%
31-60 days past due21,750
10.00%
61-90 days past due11,250
20.00%
91-180 days past due5,065
30.00%
181-365 days past due2,500
50.00%
Over 365 days past due1,145
95.00%
Total939,210
Explanation / Answer
Answer:
(a)
Est. Uncollectible Accts.
Age Interval
Balance
Percentage
Amount
Not past due
850000
3.50%
29750
1-30 days past due
47500
5.00%
2375
31-60 days past due
21750
10.00%
2175
61-90 days past due
11250
20.00%
2250
91-180 days past due
5065
30.00%
1519.5
181-365 days past due
2500
50.00%
1250
Over 365 days past due
1145
95.00%
1087.75
Total
939210
40407.25
(b)
Uncollectable account expanses
=40,407.25-1135
=$39,272.25
Description
Debit $
Credit $
Uncollectable account expanses
39272.25
Allowance for Doubtful account
39272.25
Est. Uncollectible Accts.
Age Interval
Balance
Percentage
Amount
Not past due
850000
3.50%
29750
1-30 days past due
47500
5.00%
2375
31-60 days past due
21750
10.00%
2175
61-90 days past due
11250
20.00%
2250
91-180 days past due
5065
30.00%
1519.5
181-365 days past due
2500
50.00%
1250
Over 365 days past due
1145
95.00%
1087.75
Total
939210
40407.25
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