Grimm Company performed an aged listing of their accounts receivable as of December 31 st as presented
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Question:
Grimm Company performed an aged listing of their accounts receivable as of December 31st as presented below:
1-30 Days | 31-60 Days | 61-90-Days | Over 90 Days | Total Receivables | |
Amount | $160,000 | $70,000 | $30,000 | $8,000 | $268,000 |
Estimated Uncollectible | 2% | 4% | 6% | 30% | |
Management at Grimm has estimated the amount of uncollectible (doubtful) as presented in the table above. Grimm company is trying to determine how to present the Accounts Receivable on the year end financial statement. Before any adjustment is made the balance in the allowance for uncollectible accounts is a credit balance of $3,400.
Required:
- Calculate the estimated balance in the Allowance for uncollectible accounts.
- Prepare the entry to adjust the allowance account to the correct balance.
- Prepare a partial balance sheet showing how the Accounts receivable and Allowance for uncollectible accounts will be presented as of December 31st.
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