Finan: × tion.com/flow/connect.html ignment Hel Required information Problem 7-3

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Finan: × tion.com/flow/connect.html ignment Hel Required information Problem 7-3A Aging accounts receivable and accounting for bad debts LO P2, P3 [The following information applies to the questions displayed below. Jarden Company has credit sales of $3,600,000 for year 2017. On December 31, 2017, the company's Allowar Doubtful Accounts has an unadjusted credit balance of $14.500: Jarden prepares a schedule of its Decemben accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each a category that will become uncollectible. This information is summarized here Expected Percen Uncollectible 1.25 2.00 6.s0 32.75 68.00 December 31, 2017 Age of Accounta Receivable ts Receivable Not yet due 830,000 254,000 86,000 38,000 12,000 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due over 90 days past due Problem 7-3A Part 1 Required 1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of acco method. AccountsPercent uncollecti ?11 F3 F4 8,

Explanation / Answer

Date

Accounts receivable Percent uncollectible (%) Estimated uncollectible Not due: $830,000 x 1.25% = $10,375 1 to 30: 254,000 x 2% = $5,080 31 to 60: 86,000 x 6.50% = $5,590 61 to 90: 38,000 x 32.75% = $12,445 Over 90: 12,000 x 68% = $8,160 Estimated balance of allowance for uncollectibles 41650 credit

Date

General Journal Debit Credit 31-Dec Bad debts expense 27,150 =41650-14500 Allowance for doubtful accounts 27,150

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