Littlerock Surveying showed the following partial unadjusted results at May 31, 2014, its month-end:

Part 1
Required
a. Assuming Littlerock estimates bad debts to be 2.5% of sales, prepare the adjusting entry at May 31, 2014.
b. Show how accounts receivable would be shown on the May 31, 2014, balance sheet using your calculations in (a).
Part 2
Required
c. Instead of (a) above, prepare the adjusting entry at May 31, 2014, assuming that Littlerock estimates bad debts to be based on the following aging analysis.

d. Show how accounts receivable would be shown on the May 31, 2014, balance sheet using your calculations in (c).

Transcribed Image Text:

Account Debit Credit Sales Accounts receivable Allowance for doubtful accounts $860,000 $132,000 1,800 May 31, 2014 Age of Accounts Receivable Accounts Receivable $98,000 27,000 Expected Percentage Uncollectible 1% 496 50% Not due (under 30 days) 1 to 30 days past due 7,000 Over 60 days past due