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The Company uses the percentage of receivables basis for estimating uncollectible accounts. An analysis of the accounts and the percentage of estimated bad debts are
The Company uses the percentage of receivables basis for estimating uncollectible accounts. An analysis of the accounts | |||||||||
and the percentage of estimated bad debts are as follows: | |||||||||
Month of | Age of | 9/30 | Estimated % | ||||||
Sale: | Accounts | Balance | Uncollectible | ||||||
September | 1 - 30 days | $650,000 | 2.5% | ||||||
August | 31 - 60 days | 150,000 | 6.0% | ||||||
July | 61 - 90 days | 120,000 | 33.0% | ||||||
June | 91-120 days | 50,000 | 59.0% | ||||||
Prior to June | over 120 days | 30,000 | 90.0% | ||||||
$1,000,000 | |||||||||
Instructions: | |||||||||
(a) Determine the total estimated uncollectibles. Complete the T Account to the right with the beginning, ending and adjustment amounts. | |||||||||
(Hint: There will be 3 amounts in the T account) | |||||||||
Total | |||||||||
Age of | Estimated | ||||||||
Accounts | Balance | % | Uncollectible | ||||||
Cell Reference | Cell Reference | Cell Reference | Formula | Allowance For Doubtful Accounts | |||||
Cell Reference | Cell Reference | Cell Reference | Formula | ||||||
Cell Reference | Cell Reference | Cell Reference | Formula | ||||||
Cell Reference | Cell Reference | Cell Reference | Formula | ||||||
Cell Reference | Cell Reference | Cell Reference | Formula | ||||||
Formula | |||||||||
(b) Record the adjusting journal entry to estimate bad debts. Include an explanation of the entry. | |||||||||
Debit | Credit | ||||||||
Sep 30 | Account Title | Formula | |||||||
Account Title | Cell Reference |
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