Hachey Company has accounts receivable of $95,100 at March 31, 2007. An analysis of the accounts shows these amounts.

Balance, March 31 Month of Sale 2007 2006 March $65,000 $75,000 February 12,600 8,000 December and January 10,100 2,400 November and October 7,400 1,100

$95,100 $86,500 Credit terms are 2/10, n/30. At March 31, 2007, there is a $2,200 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown on page 402.

Prepare entries for recognizing accounts receivable.

(SO 2)

Prepare entries for recognizing accounts receivable.

(SO 2)

Journalize receivables transactions.

(SOr27.3)

Prepare entries to record allowance for doubtful accounts.

(SO 3)

Determine bad debt expense, and prepare the adjusting entry.

(SO 3)

=

CEES 402 CHAPTER 8 Prepare entry for estimated uncollectibles, write-off, and recovery.

(SO 3)

Prepare entries for notes receivable transactions.

(SO 4, 5)

Journalize notes receivable transactions.

(SO-4, 5}

Prepare a balance sheet presentation of receivables.

(SO 6)

Identify the principles of receivables management.

(SO 7)

rd Reporting and Analyzing Receivables Estimated Percentage Age of Accounts Uncollectible Current 2%

1-30 days past due t 31-90 days past due 30 Over 90 days 50 Instructions

(a) Determine the total estimated uncollectibles.

(b) Prepare the adjusting entry at March 31, 2007, to record bad debts expense.

(c) Discuss the implications of the changes in the aging schedule from 2006 to 2007.