BAD DEBT EXPENSE: Each Question Worth 6 Points Na d s o oad Musky Company analyz

Question

BAD DEBT EXPENSE: Each Question Worth 6 Points Na d s o oad Musky Company analyzes its accounts receivable at December 31, 2017 and arrives at the aged categories below along with percentages that are estimated as uncollectible. Age Group Accounts Receivable Estimated Loss % Current (not past due) 1-30 days past due 31-60 days past due 61-90 days past due Over 90 past due S200,000 S50,000 $40,000 S30,000 S60,000 0.1%2 000 2%-10,000 5%-Zo.ooo 25% : 300.0 At the beginning of the year of 2017, Musky Company had a credit balance of 6300 S11,000 in the Allowance for Uncollectible Accounts. During the year Musky Company wrote off $3,000 in receivables as uncollectible. 1) what amount of expense will Musky Company report for 2017? 2) What is the balance of accounts receivable for Musky at December 31, 2017?

Explanation / Answer

1) $ Estimated bad debt expenses as per aging analysis 68000 Less: Credit balance of Allowance for Uncollectible accounts as on Dec 31, 2017 before adjustment (11000-3000) -8000 Amount of expense will Musky company report for 2017 60000 2) $ Total accounts receivable as on Dec 31, 2017 before adjustment (200000+50000+40000+30000+60000) 380000 Less: allowance for uncollectible accounts -68000 Balance of accounts receivable 312000

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