2. Fife Co. has the following account balances at December 31 of the current year: Accounts Receivable $42,400 and Allowance for Doubtful Accounts $1,600, credit balance. Fife uses the aging of accounts receivable to estimate bad debts. The following aging schedule reflects the situation at year-end:

Schedule of accounts receivable

Customer name

Co. AUS

Co. BEL

Co. CHE

Co. DUT

Co. EST

Totals 42,400 Percent uncollectible

Estimated uncollectible accounts

Required

Total

Not yet due

5,000 1,000 8,000 3,000 9,000

26,000 2%

1 30 days past due

3,000 2,000 3,000 1,000

-

9,000 5%

31 60 days past due

61 90 days past due

$11,000 5,300 13,100 4,000 9,000

Over 90 days past due

-

500 - - - 5,000 1,900 500 10% 25% 40%

2,000 1,000 2,000

1,000 800 100 -- --

a. Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, current year balance sheet.

b. Prepare the journal entry to record bad debts expense for the current year.

2. Fife Co. has the following account balances at December 31 of the current year: Accounts Receivable $42,400 and Allowance for Doubtful Accounts $1,600, credit balance. Fife uses the aging of accounts receivable to estimate bad debts. The following aging schedule reflects the situation at year-end: Schedule of accounts receivable Customer name Total Not yet due 1 - 30 days 31-60 days past due past de 61-90 days past due Over 90 days past due 2.000 1,000 2.000 1.000 800 100 500 3.000 2.000 3.000 1.000 Co. AUS Co. BEL Co. CHE Co. DUT Co. EST Totals Percent uncollectible Estimated uncollectible accounts $11,000 5,300 13,100 4,000 9,000 42.400 5.000 1,000 8,000 3,000 9,000 26.000 2% 90,00 5% 5.000 10% 1.900 25% 500 40% Required a. Calculate the amount of the Allowance for Doubtful Accounts that should appear on the December 31, current year balance sheet. b. Prepare the journal entry to record bad debts expense for the current year