Exercise 9-4 Menge Company has accounts receivable of $108,600 at March 31. Cred

Question

Exercise 9-4 Menge Company has accounts receivable of $108,600 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credt balance of $1,500 prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company's estimate of bad debts is shown below. Estimated Age of Balance, Percentage Accounts March 31 Uncollectible 1-30 days $72,300 4% 31-60 days 18,200 7% 61-90 days 9,300 24% Over 90 days 8,000 55% 108,600 Determine the total estimated uncollectibles. Total estimated uncollectibles (Credit account titles are automatically indented when amount is entered. Do not indent Prepare the adjusting entry at March 31 to record bad debt expense. manually Debit Credit Date Account Titles and Explanation Mar. 33

Explanation / Answer

Calculate total estimated uncollectible :

Total estimated uncollectibles = $11238

b) Adjusting entry :

Days Amount % uncollectibles Uncollectible amount 1-30 days 72300 4% 2892 31-60 days 18200 7% 1274 61-90 days 9300 24% 2232 Over 90 days 8800 55% 4840 Total 108600 11238

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