Question 3

Question 3 [5 points] Vision Consulting Inc. had credit sales of $2,800,000 in 2014. At year End, December 31, 2014 the company's Allowance for Doubtful Accounts had an unadjusted credit balance of $18,000. The accountant for Vision Consulting Inc. has prepared a schedule of the December 31, 2014 accounts receivable by age and, on the basis of past experience, has estimated the percentage of the receivables in each age category that will become uncollectible. This information is summarized as follows: December 31, 2014 Age of Accounts Estimated Percentage Accounts Receivable Receivable Uncollectible $ 780,000 444,000 90,000 38,000 18,000 Not due (under 30 days) 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due 1.40 % 2.50 6.50 32.50 65 a) Compute the amount that should appear in the December 31, 2014 balance sheet as the allowance for doubtful accounts. Allowance for doubtful accounts = $ b) Prepare the journal entry to record bad debt expense for 2014. General Journal Page Gj1 Date Account/Explanation F Debit Credit To record bad debt expense