Adventure Company uses the aging of accounts receivable method to estimate Bad D

Question

Adventure Company uses the aging of accounts receivable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, (2) 30-90 days old, and (3) more than 90 days old. Based on experience, management has estimated what portion of receivables of a specific age will not be paid as follows: (1) 2%, (2) 16%, and (3) 39%, respectively. At December 31, 2016, the unadjusted credit balance in the Allowance for Doubtful Accounts was $180. The total Accounts Receivable in each age category were: (1) 1-30 days old, $61,000, (2) 30-90 days old, $10,000, and (3) more than 90 days old, $3,000. Required: Calculate the estimate of uncollectible accounts at December 31, 2016. Estimated uncollectible accounts____________Prepare the appropriate adjusting entry dated December 31, 2016. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Explanation / Answer

a % age uncollectible amount estimated uncollectible 1- 30 days 2% 61000 1220 30-90 days 16% 10000 1600 more than 90 39% 3000 1170 total 3990 b Bad debt expense 3990 To allowance for uncollectible 3990

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.