Exercise 8-5 Balance, March 31 Estimated Percentage Uncollectible Age of Account

Question

Exercise 8-5

Balance, March 31

Estimated Percentage
Uncollectible

Age of Accounts

2017

2016

Current

$64,800

$79,610

1–30 days past due

13,800

7,710

31–90 days past due

10,500

2,480

Over 90 days past due

8,100

1,170

$97,200

$90,970

SHOW LIST OF ACCOUNTS

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Account Titles and Explanation

Debit

Credit

Exercise 8-5

Sweet Acacia Industries has accounts receivable of $97,200 at March 31, 2017. Credit terms are 2/10, n/30. At March 31, 2017, there is a $1,891 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage-of-receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below.

Balance, March 31

Estimated Percentage
Uncollectible

Age of Accounts

2017

2016

Current

$64,800

$79,610

2 %

1–30 days past due

13,800

7,710

5

31–90 days past due

10,500

2,480

29

Over 90 days past due

8,100

1,170

47

$97,200

$90,970

Explanation / Answer

1) total Estimated uncollectibles Age of 2017 percentage estimated accounts uncollectible bad debts Current 64,800 2% 1296 1--30 13,800 5% 690 31--90 10,500 29% 3045 over 90 8,100 47% 3,807 total 8838 total estimated uncollectibles $8,838 2) Account titles and Explanation Debit Credit Bad debts expense 6947 allowance for uncollectible accounts 6,947 (8838-1,891)

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