Question
On March 31, 2016, Merle Company had an unadjusted credit balance of $120,000 in its allowance for uncollectible accounts and a $587,400 debit balance in
On March 31, 2016, Merle Company had an unadjusted credit balance of $120,000 in its allowance for uncollectible accounts and a $587,400 debit balance in its accounts receivable account. The Company reported net credit sales of $4,500,000 during the first quarter. An analysis of Merles trade accounts receivable at that date revealed the following:
Days Past Due | Amount | Estimated uncollectible |
Current | $124,000 | 4% |
1-30 days | 74,500 | 8% |
31-60 days | 67,200 | 10% |
61-90 days | 45,700 | 35% |
Over 90 days | 276,000 | 50% |
Total | $587,400 |
|
What amount should Merle report as Allowance for Doubtful Accounts in its March 31, 2016, balance sheet?
Prepare the required journal entry at March 31, 2016 to record the uncollectible accounts expense.
During 2016 after making the above journal entry, Merle Company wrote off $20,000 in receivables and recovered $15,000 that had been written off. Prepare the required journal entries. Omit explanations.
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