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Miller, Inc., analyzed its accounts receivable balances at December 3 1 and arrived at the aged balances listed below, along with the percentage that is



Miller, Inc., analyzed its accounts receivable balances at December 31 and arrived at the aged balances listed below, along with the percentage that is estimated to be uncollectible:


Age Group
Balance Probability of
Noncollection
030 days past due $180,0001%
3160 days past due 40,0004%
61120 days past due 22,0005%
121180 days past due 14,00012%
Over 180 days past due 8,00025%
$264,000

The company handles credit losses using the allowance method. The credit balance of the Allowance for Doubtful Accounts is $1,150 on December 31, before any adjustments.

Prepare the adjusting entry for estimated credit losses on December 31.
Prepare the journal entry to write off the Lyons Companys account on April 10 of the following year in the amount of $575.

a.

General Journal
Date Description Debit Credit
Dec.31 Answer
Bad Debts Expense

Answer
6,350

Answer
0

Answer
Allowance for Doubtful Accounts

Answer
0

Answer
6,350

To record allowance for credit losses.

b.

General Journal
Date Description Debit Credit
April 10 Answer
Allowance for Doubtful Accounts

Answer
525

Answer
0

Answer
Accounts Receivable - Lyons Company

Answer
0

Answer
525

To write off Lyons Company's account.

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