The total outstanding accounts receivable for the Serious Business Corp is $350,000 as of July 30^th, 2020. An evaluation of the customers accounts reflects an aging of the receivables as follows: Current- $320,000; 1 to 60 days overdue- $80,000; 61 to 120 days overdue- $50,000; 121 to 180 days overdue- $4,000; and over 240 days past due- $34,000. Past history of the uncollectible accounts resulted in the following percentages: Current- 10%; 1 to 60 days overdue- 15%; 61 to 120 days overdue- 25%; 121 to 180 days overdue- 35%, and over 240 days overdue- 55%.

The trial balance, prior to the adjustment for this years estimate, reflects a credit balance of $37,000 in the Allowance for Doubtful Accounts. Management considers anything over (under) +/- $20,000 a material amount.

Required: 1) Prepare, in good form, an aging schedule for July 30^th.

2) Prepare the adjusting entry required at July 30^th.

3) Do you think the amount at June 30^th is inadequate (too low),

or excessive (too high)? Explain.

4) If it is inadequate or excessive, what would you recommend to

management to correct the problem?