[The following information applies to the questions displayed below.] Jarden Com
ID: 2524860 • Letter: #
Question
[The following information applies to the questions displayed below.]
Jarden Company has credit sales of $3,000,000 for year 2017. On December 31, 2017, the company’s Allowance for Doubtful Accounts has an unadjusted credit balance of $24,808. 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
Age of
Accounts Receivable
Expected Percent
Uncollectible
$
600,000
Not yet due
1.50
%
240,000
1 to 30 days past due
2.25
48,000
31 to 60 days past due
6.75
24,000
61 to 90 days past due
34.00
4,800
Over 90 days past due
71.00
Required:
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method.
Journal entry worksheet
· Record the estimated bad debts.
December 31, 2017
Accounts Receivable
Age of
Accounts Receivable
Expected Percent
Uncollectible
$
600,000
Not yet due
1.50
%
240,000
1 to 30 days past due
2.25
48,000
31 to 60 days past due
6.75
24,000
61 to 90 days past due
34.00
4,800
Over 90 days past due
71.00
Explanation / Answer
1. Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2017, using the aging of accounts receivable method
Journal entry :
Days Amount Percent uncollectible Uncollectible amount Not yet due 600000 1.5% 9000 1 to 30 days 240000 2.25% 5400 31 to 60 days 48000 6.75% 3240 61 to 90 days 24000 34% 8160 Over 90 4800 71% 3408 Total estimated uncollectible 29208Related Questions
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