Andrews Corporation uses the aging method for its uncollectible accounts. At the end of the year, its accounts receivable were categorized as follows: TYK-1 Estimated Percentage Age Group Amount Uncollectible Not yet past due $ 80,000 1%
1-30 days past due 45,000 | 31-60 days past due 20,000 L 61-90 days past due 12,000 4

>90 days past due 8,000 7

$165,000 Before Andrews recorded the bad debts expense end-of-period adjustment, the balance in Allowance for Bad Debts was $200.

Required: (1) Calculate the amount of Andrews’ estimated uncollectible accounts at the end of the year.

(2) Using T-accounts, prepare the bad debts end-of-period adjustment.

(3) Show how the net accounts receivable would be reported in Andrews’

balance sheet at the end of the year.

(4) Discuss the effect on Andrews’ year-end financial statements if the end- of-period adjustment had not been made in (2). Ignore income taxes. TYK-1