The Open Accounts Recievable aging is as follows for Dec 31,2008: Current 1-30 3
ID: 2662393 • Letter: T
Question
The Open Accounts Recievable aging is as follows for Dec 31,2008: Current 1-30 31-60 61-90 over90 days 75,000 38000 15000 8000 12000 Using the following estimated percentage uncollectible Current 3% 1-30 dys past due 8% 31-90 dys pastdue 27% over 90days 52% Calculate the estimated uncollectible Assuming there is a debit balance in Allowance for Doubtfulaccounts of $1,712. Prepare the adjusting entry at Dec 31, 2008 torecord bad debt expense. The Open Accounts Recievable aging is as follows for Dec 31,2008: Current 1-30 31-60 61-90 over90 days 75,000 38000 15000 8000 12000 Using the following estimated percentage uncollectible Current 3% 1-30 dys past due 8% 31-90 dys pastdue 27% over 90days 52% Calculate the estimated uncollectible Assuming there is a debit balance in Allowance for Doubtfulaccounts of $1,712. Prepare the adjusting entry at Dec 31, 2008 torecord bad debt expense.Explanation / Answer
Current 1-30 31-60 61-90 over90days Total Balance In AccountsReceivables as on Dec 31,2008 $75,000 $38,000 $15,000 $8,000 $12,000 $148,000 % of Uncollectibleamounts 3% 8% 27% 27% 52% Total estimate Uncollectible amounts $2,250 $3,040 $4,050 $2,160 $6,240 $17,740 Total $17,740 is needed to be maintained in Allowance forDoubtful Accounts. There is under estimation of uncollectibleamount in prior periods and so that amount should also be set offagainst current year's profit. So total debit to bad debt expensewould be $19,452 ($17,740 + $1,712). The entry to record allownace for doubtful debts: ================================= Bad Debtexpense $19,452 Allownace for DoubtfulAccounts $19,452Related Questions
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