Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E8-2A Credit Losses Based on Accounts Receivable Hunter, Inc. analyzed its accounts receivable balances at Dec. 31, and arrived at the aged balances listed below,

E8-2A

Credit Losses Based on Accounts Receivable Hunter, Inc. analyzed its accounts receivable balances at Dec. 31, and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectable:

Age Group Balance Probability of Noncollection
0-30 days past due $90,000 1
31-60 days past due 20,000 2
61-120 days past due 11,000 6
121-180 days past due 6,000 10
Over 180 days past due 5,000 25
$132,000

The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $820 on December 31, before any adjustments.

a. Prepare the adjusting entry for estimated credit losses on December 31.

b. Prepare the journal entry to write off the Rose Company's account on April 10 of the following year in the amount of $625.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services An Integrated Approach

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan

18th Edition

0137879199, 9780137879199

More Books

Students also viewed these Accounting questions