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Instructions Cowen's, a large department store located in a metropolitan area, has been experiencing difficulty in estimating its bad debts. The company has decided to prepare an aging schedule for its outstanding accounts receivable and estimate bad debts by the due dates of its receivables. This analysis discloses the following information: Balance Age of Receivable Estimated Percentage Uncollectible $191,000 Under 30 days 0.8% 118,000 30-60 days 2.0% 5.0% 73,000 61-120 days 41,000 121-240 days 20.0% 35.0% 25,000 241-360 days 19,000 Over 360 days $467,000 60.0% Required: 1. Use the preceding analysis to compute the estimated amount of uncollectible receivables. 2. What is the net realizable value of Cowen's accounts receivable ? 3. Prepare the journal entry to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is: A. O B. $3,000 (debit) C. $2,500 (credit) CHART OF ACCOUNTS Cowen's General Ledger ASSETS REVENUE 411 Sales Revenue 111 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings 1. Use the Aging analysis to compute the estimated amount of uncollectible receivables. The estimated amount uncollectible based on the data provided is $ 2. What is the net realizable value of Cowen's accounts receivable? Net realizable value of accounts receivables 3a. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is $0. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3b. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is a $3,000 debit. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3c. Prepare the journal entry on June 30 to record Cowen's estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is a $2,500 credit General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2