takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator =-&inprogress=false M eBook Calculator Using an Aging Schedule to Account for Bad Debts Carter Company sells on credit with terms of n/30. For the $500,000 of accounts at the end of the year that are not overdue, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estimates the likelihood of collection going down to 70%. The probability of collecting the $100,000 of accounts more than a month past due is estimated to be 25%. Required: 1. Prepare an aging schedule to estimate the amount of uncollectible accounts. Amount Uncollectible Carter Company Aging Schedule to Account for Bad Debts Category Estimated Amount Percent Uncollectible Current Past due: Less than one month More than one month Totals More than one month % Totals 2. On the basis of the schedule in part (1), Identify and analyze the adjustment needed to estimate bad debts. Assume that the balance in Allowanc Doubtful Accounts is $20,000. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, le, a decrease, be sure to enter the answer with a minus sign. Remember: If a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Stockholders Assets Liabilities Equity Revenues Check My Work more Check My Work to remaining Previous Next takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator =-&inprogress=false M eBook Calculator Using an Aging Schedule to Account for Bad Debts Carter Company sells on credit with terms of n/30. For the $500,000 of accounts at the end of the year that are not overdue, there is a 90% probability of collection. For the $200,000 of accounts that are less than a month past due, Carter estimates the likelihood of collection going down to 70%. The probability of collecting the $100,000 of accounts more than a month past due is estimated to be 25%. Required: 1. Prepare an aging schedule to estimate the amount of uncollectible accounts. Amount Uncollectible Carter Company Aging Schedule to Account for Bad Debts Category Estimated Amount Percent Uncollectible Current Past due: Less than one month More than one month Totals More than one month % Totals 2. On the basis of the schedule in part (1), Identify and analyze the adjustment needed to estimate bad debts. Assume that the balance in Allowanc Doubtful Accounts is $20,000. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, le, a decrease, be sure to enter the answer with a minus sign. Remember: If a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Stockholders Assets Liabilities Equity Revenues Check My Work more Check My Work to remaining Previous Next