Aging of accounts receivable allowance method (Learning Objective 4)

5–10 min.

Umbrella.com had the following balances on December 31, 2014, before the year-end adjustments:

Accounts Receivable 105,600 Allowance for Uncollectible Accounts Bal Bal 2,000 The aging of receivables yields these data:

Accounts Receivable Estimate Percentage Uncollectible .........

1–30 Days

$66,000 31–60 Days Age of Accounts

$24,000 $12,000 $3,600

× 1% × 2% × 6% × 53%

61–90 Days

$105,600 Over 90 Days Total Receivables Journalize Umbrella’s entry to adjust the allowance account to its correct balance on December 31, 2014.

AppendixLO1