Rowen Company has accounts receivable of $241,000 at September 30, 2021. An analysis of the accounts shows

Question:

Rowen Company has accounts receivable of $241,000 at September 30, 2021. An analysis of the accounts shows the following:

Month of Sale ..................... Balance
September .......................... $170,000
August ..................................... 35,700
July ........................................... 20,000
April, May, and June .............. 15,300
$241,000

Credit terms are 2/10, n/30. The unadjusted balance in the Allowance for Doubtful Accounts on September 30, 2021, is $1,400 debit. The company uses an aging schedule to estimate uncollectible accounts. The company’s percentage estimates of bad debts are as follows:

Number of Days Outstanding .............................. Estimated % Uncollectible
0–30 .............................................................................................. 1%
31–60 .......................................................................................... 10%
61–90 .......................................................................................... 25%
Over 90 ....................................................................................... 60%

Instructions

a. Prepare an aging schedule to determine the total estimated uncollectible accounts at September 30, 2021.

b. What is the carrying amount of the accounts receivable at September 30, 2021?

c. Prepare the adjusting entry at September 30 to record bad debt expense.

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...

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