O ezto.mheducation.com/hm.tpx E connect BUS-A 201 Introduction to Finan Accounti

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O ezto.mheducation.com/hm.tpx E connect BUS-A 201 Introduction to Finan Accounting: Template v2: BUS-A Introduction to Financial Account ACCOUNTING 2 Exam: Part 1 (Problems) Question 1 (of 5) 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 v ill not be paid as follows (1) 3% (2) 15%, and 3) 40% respectively At December 31, 2016, the unadjusted credit balance in the Allowance for Doubtful Accounts was $240 The total Accounts Receivable in each age category were (1) 1-30 days old, $75.000, (2) 30-90 days old, $17,000, and (3) more than 90 days old $4,000 Required: a. Calculate the estimate of uncollectible accounts at December 31, 2016, b. Prepar e the appropriate adjusting entry dated December 31 2016 (If no entry is required for a transactionlevent, select"No Journal Entry Required" in the first account field.) DOLL Esc F1 F2 F3 F4 F5 F6 F7 Fe Fe

Explanation / Answer

1) Estimated uncollectible amount :

b) Adjusting entry :

Account receivable % Estimated uncollectible amount 1-30 days 75000 3% 2250 30-90 days 17000 15% 2550 More than 90 days 4000 40% 1600 Total 6400

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