Question
Pharoah Salon Supply Company has accounts receivable of $103,900 at March 31, 2025. An analysis of the accounts shows these amounts: Balance, March 31 Month
Pharoah Salon Supply Company has accounts receivable of $103,900 at March 31, 2025. An analysis of the accounts shows these amounts:
| Balance, March 31 | |||||
|---|---|---|---|---|---|
| Month of Sale | 2025 | 2024 | |||
| March | $74,000 | $75,900 | |||
| February | 12,200 | 8,600 | |||
| December and January | 10,600 | 2,800 | |||
| October and November | 7,100 | 1,500 | |||
| $103,900 | $88,800 | ||||
Credit terms are 2/10, n/30. At March 31, 2025, there is a $4,100 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company's estimates of uncollectibles are as shown below:
| Age of Accounts | Estimated Percentage Uncollectible | |||
|---|---|---|---|---|
| Current | 2 | % | ||
| 130 days past due | 7 | |||
| 3190 days past due | 25 | |||
| Over 90 days past due | 50 | |||
Prepare the adjusting entry at March 31, 2025, to record bad debt expense
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