Question
Ari's Bakery has the following information from its December 31, 2017 year end: Sales: $290,000 Accounts Receivable $53,117* Allowance for Doubtful Accounts $5,850 (unadjusted credit
Ari's Bakery has the following information from its December 31, 2017 year end:
Sales: $290,000
Accounts Receivable $53,117*
Allowance for Doubtful Accounts $5,850 (unadjusted credit balance)
*Age of Accounts
Current Accounts $29,600
0-30 days past due 12,850
31-60 days past due 5,217
61-90 days past due 3,000
Over 90 days past due 2,450
Total Accounts Receiveable $53,117
Assuming the company uses the allowance method, determine the required year end adjusting entry (rounded to the nearest whole dollar)for allowance for doubtful accounts under the following assumptions:
1) Allowance for doubtful accounts is estimated based on 12%of accounts receivable
2) Bad debt expense is estimated based on 1% of sales
3) Allowance for doubtful accounts is estimated based on the following aged accounts receivable analysis Estimated percentage uncollectible
Current accounts 8%
0-30 days past due 10%
31-60 days past due 15%
61-90 days past due 20%
Over 90 days past due 50%
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