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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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