Hachey Company has accounts receivable of $95,100 at March 31, 2018. An analysis
ID: 2540526 • Letter: H
Question
Hachey Company has accounts receivable of $95,100 at March 31, 2018. An analysis
of the accounts shows these amounts.
Month of sale Balance, March 31
Mar 2018 $65,000
Feb $12,600
Dec 2017 and Jan 2018 $10,100
November and October2017 $7,400
$95,100
Credit terms are 2/10, n/30. At March 31, 2018, there is a $2,200 credit balance in Allowance
for Doubtful Accounts prior to adjustment. The company uses the percentage of
receivables basis for estimating uncollectible accounts. The company estimates of bad debts are as shown below
Age of account Estimatesed presentage Uncollectible
Current 2%
1-30 days past due 7%
31-90 days past due 30%
Over 90 days 50%
A) Determine the total estimated uncillectible.
B) Prepare the adjusting entry at March 31,2018 to record bad debts expense?
Explanation / Answer
A) Determination of total estimated uncollectible:
B)
Account receivable Amount % Estimated uncollectible Current $65,000 2 $1,300 1-30 days past due $12,600 7 $882 31-90 days past due $10,100 30 $3,030 Over 90 days $7,400 50 $3,700 Total estimated uncollectible $8,912Related Questions
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