Question
Leland Company has accounts receivable of $98,100 at March 31. An analysis of the accounts shows the following. Month of Sale Balance, March 31 March
Leland Company has accounts receivable of $98,100 at March 31. An
analysis of the accounts shows the following.
Month of Sale
Balance, March 31
March
$65,000
February
17,600
January
8,500
Prior to January
7,000
$98,100
Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts
has a credit balance of $1,200 prior to adjustment. The company uses the
percentage of receivables basis for estimating uncollectible accounts. The
company's estimate of bad debts is as follows.
Age of Accounts
Estimated Percentage Uncollectible
1 - 30 days 2.0%
30 - 60 days. 5.0%
60 - 90 days 30.0%
Over 90 days 50.0%
(a) Determine the total estimated uncollectibles (5 pts):
ANSWER:
(b) Prepare the adjusting entry at March 31 to record bad debts expense (4 pts each):
ANSWER: Bad Debts Expense $ ______________Credit or Debit?______________
Name of other account:____________________Amount: $______________ Credit or Debit?__________
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