Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed belowj Jarden Company has credit sales of $2,400,000 for year 2017. On December 31 2017, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $13,514. Jarden prepares a schedule of its December 31, 2017, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here December 31, 2017 Accounts Receivable Expected Percent Uncollectible e o Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due $ 480,000 192,000 38,400 19,200 0.80% 1.55 6.05 30.50 63.00 3,840 2. Prepare the adjusting entry to record bad debts expense at December 31, 2017 View transaction list Journal entry worksheet Record the estimated bad debts Note: Enter debits before credits

Explanation / Answer

Solution 2:

Existing balance in allowance for doubtful accounts = $13,514

Bad debts expense to be recorded at December 31, 2017 = $17,414.40 - $13,514 = $3,900.40

Computation of Allowance for Uncollectible Accounts - Jarden Company Ageing Accounts Receivables % Uncollectible Required Allowance Not yet due $480,000.00 0.80% $3,840.00 1 to 30 days past due $192,000.00 1.55% $2,976.00 31 to 60 days past due $38,400.00 6.05% $2,323.20 61 to 90 days past due $19,200.00 30.50% $5,856.00 Over 90 days past due $3,840.00 63.00% $2,419.20 Total $733,440.00 $17,414.40

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