Question
Jackson Company has the following unadjusted account balances at December 31, 2018. Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (debit balance).
Jackson Company has the following unadjusted account balances at December 31, 2018.
Accounts Receivable of $185,700 and Allowance for Doubtful Accounts of $1,600 (debit balance).
Also, Jackson has just determined that $1,600 of $3,200 balance that is over 90 days past due will not be collected.
This company uses the aging of accounts receivable to estimate its bad debts. The following aging schedule reflects its accounts receivable at the year-end:
Account Age | Age Group Balance | Estimated Uncollectible Percentage |
Current (not yet due) | $96,000 | 1.5% |
1-30 days past due | 64,000 | 4.0 |
31-60 days past due | 16,000 | 10.0 |
61-90 days past due | 6,400 | 40.0 |
Over 90 days past due | 3,200 | 65.0 |
Total | $185,600 |
|
Required:
- Record if necessary an entry for the $1,600 deemed uncollectible.
- Calculate the net receivable that should appear on the December 31, 2018 balance sheet.
Prepare the adjusting journal entry to record bad debts expense for December 31, 2018.
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