Blanchard Company's accounts receivable subsidiary ledger reveals the following information: Blanchard Company's receivable collection experience indicates that,

Question:

Blanchard Company's accounts receivable subsidiary ledger reveals the following information:

Blanchard Company's receivable collection experience indicates that, on average, losses have occurred as follows:
Age of Accounts Uncollectible Percentage
0â€“30 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7%
31â€“60 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4
61â€“90 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
91â€“120 days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2
Over 120 days . . . . . . . . . . . . . . . . . . . . . . . . . . 60.0
The Allowance for Bad Debts credit balance on December 31, 2011, was $2,245 before adjustment.
1. Prepare an accounts receivable aging schedule.
2. Using the aging schedule from (1), compute the Allowance for Bad Debts balance as of December 31, 2011.
3. Prepare the end-of-year adjusting entry.
4. (a) Where accounts receivable are few in number, such as in this exercise, what are some possible weaknesses in estimating bad debts by the aging method?
(b) Would the other methods of estimating bad debts be subject to these same weaknesses?Explain.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...