Cowens, 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%
115,000	30-60 days	2.0%
73,000	61-120 days	5.0%
41,000	121-240 days	20.0%
25,000	241-360 days	35.0%
19,000	Over 360 days	60.0%
$464,000

CHART OF ACCOUNTS

Cowens

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales Revenue

	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

Required:

1.

Use the preceding analysis to compute the estimated amount of uncollectible receivables.

2.

Prepare the journal entry to record Cowens estimated uncollectibles, assuming the balance in Allowance for Doubtful Accounts prior to adjustment is:

A.	0
B.	$3,100 (debit)
C.	$2,700 (credit)

Use the Aging analysis to compute the estimated amount of uncollectible receivables.

The estimated amount uncollectible based on the data provided is $_________________