Question
a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the
a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 6% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,500 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2,500 debit.
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[The following information applies to the questions displayed below.] Daley Company prepared the following aging of receivables analysis at December 31.
Days Past Due | |||||||||||||||||||||||
Total | 0 | 1 to 30 | 31 to 60 | 61 to 90 | Over 90 | ||||||||||||||||||
Accounts receivable | $ | 645,000 | $ | 411,000 | $ | 105,000 | $ | 51,000 | $ | 33,000 | $ | 45,000 | |||||||||||
Percent uncollectible | 1 | % | 2 | % | 5 | % | 7 | % | 10 | % | |||||||||||||
a. Complete the below table to calculate the estimated balance of Allowance for Doubtful Accounts using aging of accounts receivable. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $5,100 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,600 debit.
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