Patillo Resort has accounts receivable of $97,500 at March 31. An analysis of the accounts shows the following. LO4 Month of Sale Balance, March 31 March $65,000 February 17,600 January 8,500 Prior to January 6,400 $97,500 Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,600 prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company’s estimate of bad debts is as follows:

Estimated Percentage Age of Accounts Uncollectible 1–30 days 2.0%
31–60 days 5.0%
61–90 days 30.0%
Over 90 days 50.0%

Instructions

(a) Determine the total estimated uncollectibles.

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