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Sammy's Small Engine Shop uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year, an
Sammy's Small Engine Shop uses the aging of accounts receivable method to estimate its bad debts expense On December 31 of the current year, an aging analysis of accounts receivable revealed the following: Accounts Receivable Estimated Account Uncollectible 1.0% 15.0% 600% 580,000 Not due yet 275,0001-30 days overdue 115,000 31-60 s overdue s overdue 48,000 61-90 36,000 91-120 s overdue overdue 1,070,000 Total a) Calculate the amount of the allowance for doubtful accounts that should appear on the current balance sheet Accounts Receivable Estimated Amount Uncollectible Uncollectible Account 580,000 Not due yet 275,000 1-30 overdue 1.0% 115,000 31-60 s overdue 8,000 61-90 days overdue 15.0% 350% 36,000 91-120 16,000 Over 120 s overdue overdue 1,070,000 Total b) The balance of the allowance for doubtful accounts on January 1 of the current year was $36,800. The accounts receivable written off during the current year totaled $40,200. Prepare the journal entry showing the total accounts written off for the year c) Calculate the bad debts expense that should be reported on the current year's income statement d) Prepare the adjusting entry to record the bad debts expense on December 31 of the current year
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