PHINTER VERSIONBACKERT . Credit terms are 2/10, n/30. At March 31, 2017, there i

Question

PHINTER VERSIONBACKERT . Credit terms are 2/10, n/30. At March 31, 2017, there is a $2,212 credit balance in Allowance for Blue Spruce Corp, has accounts receivable of $93,500 at March 31, 2017 Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis are as shown below. for Balance, March 31 Estimated 2017 2016 Uncollectible 2% $65,300 $70,010 11,800 7,430 31-90 days past due 9,300 2,260 Over 90 days past due 7,100 1,130 $93,500 $80,830 Current 1-30 days past due 32 47 Prepare the adjusting entry at March 31, 2017, to record bad debt expense. (Credit account titles are automatically indented when amount is entered. Do not indent Debit 7 8

Explanation / Answer

Age of accounts Balance as at March'2017 Estimate percentage uncollectible Amount of uncollectibles Current                                       65,300 2%                                           1,306 1-30 days                     11,800 5%                                              590 31-90 days                       9,300 32%                                           2,976 Over 90 days                                         7,100 47%                                           3,337 Total estimated uncollectibles                                       93,500                                           8,209 Existing allowance balance as at 31st March 2017                                           2,212 Amount of adjustment                                           5,997 Adjustment entry as at 31st Mar'2017 to record the bad debt expense Bad Deby Expense Dr                                                              5,997 Allowance for Doubtful account Cr                                           5,997

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