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PLEASE HELP, THANK YOU IN ADVANCE The following information applies to the questions displayed below. Blue Skies Equipment Company uses the aging approach to estimate
PLEASE HELP, THANK YOU IN ADVANCE
The following information applies to the questions displayed below. Blue Skies Equipment Company uses the aging approach to estimate bad debt expense at the end of each accounting year. Credit sales occur frequently on terms n/60. The balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, (2) up to one year past due, and (3) more than one year past due. Experience has shown that for each age group, the average loss rate on the amount of the receivable at year-end due to uncollectibility is (8) 9 percent. (6) 8 percent, and (a 30 percent, respectively. At December 31, 2019 (end of the current accounting year), the Accounts Receivable balance was $51,700 and the Allowance for Doubtful Accounts balance was $1,050 (credit). In determining which accounts have been pald, the company applies collections to the oldest sales first. To simplify, only five customer accounts are used; the details of each on December 31, 2019, follow: Credit B. Brown-Account Receivable Explanation Debit Sale 13.100 Collection Collection Date 03/12018 06/30/2018 01/312019 Balance 13.100 3,300 4,600 9,800 5.200 Credit Date 02/28/2019 04/15/2019 11/30/2019 D. Donalds-Account Receivable Explanation Debit Sale 22.000 Collection Collection Balance 22,000 14,700 9,300 7,300 5,400 N. Napler-Account Receivable Explanation Debit Sale 9,700 Collection Date 11/30/2019 12/15/2019 Credit Balance 9,700 7.600 2,100 Balance 5.800 Date 03/02/2017 04/15/2017 09/01/2018 10/15/2018 02/01/2019 03/01/2019 12/31/2019 S. Strothers-Account Receivable Explanation Debit Credit Sale 5,800 Collection 5,800 Sale 9,800 Collection 3,300 Sale 22,700 Collection 7.800 Sale 3,600 9,800 6,500 29,200 21,400 25,000 T. Thomas-Account Receivable Explanation Debit Sale 4.600 Date 12/30/2019 Credit Balance 4,600 P6-3 Part 1 Required: 1. Compute the total accounts receivable in each age category. Amount Not yet due Up to one year past due More than one year past due P6-3 Part 2 2. Compute the estimated uncollectible amount for each age category and in total. Amount Not yet due Up to one year past due More than one year past due Total Journal entry worksheetStep by Step Solution
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