Question
Smith Company shows the following information on December 31, 2019, the companys fiscal year-end: Account Debit Credit Accounts receivable $17,000 Allowance for doubtful accounts 400
Smith Company shows the following information on December 31, 2019, the companys fiscal year-end: Account Debit Credit
Accounts receivable $17,000
Allowance for doubtful accounts 400
Sales ($5,000 of cash sales) $75,000
The companys accountant generated the following aging schedule of accounts receivable:
Number of Days Outstanding Amount Receivable Estimated Uncollectible
0-30 days $10,000 1%
31-60 days 4,000 5%
61-90 days 2,000 10%
Over 90 days 1,000 25%
Required:
a.) Prepare the adjustment to allowance for doubtful accounts based on the information above.
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