Help me please with this question parts! Young and Old Corporation (YOC) uses tw
ID: 2409394 • Letter: H
Question
Help me please with this question parts! Young and Old Corporation (YOC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered young and have a 4% uncollectible rate Accounts more than 60 days are considered old and have a 35% uncollectible rate T. ured has $110,000of young accounts and s500,000f old accounts, how much should be repoted in 1. If YOC has $110,000 of young accounts and $500,000 of old accounts, how much should be reported in the Allowance for Doubtful Accounts? ount to be Reported 2. If YOC's Allowance for Doubtful Accounts currently has an unadjusted credit balance of $50,000, how much should be credited to the account? Amount to be CreditedExplanation / Answer
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Working:
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The allowance for doubtful accounts will have a credit balance . As per the calculation above, the amount to be reported in the allowance account is $179,400. Since, there is an unadjusted credit balance of $50,000 in the allowance account, we need to credit only the difference i.e., $129,400 ($179,400 - $50,000) to the account.
3.
The allowance for doubtful accounts will have a credit balance . As per the calculation above, the amount to be reported in the allowance account is $179,400. Since, there is an unadjusted debit balance of $6,000 in the allowance account, we need to credit the total i.e., $185,400 ($179,400 + $6,000) to the account.
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