Question
Use the following information for questions 6-8: Jackson Corporation uses the aging of accounts receivable approach ( allowance method ) to estimate uncollectible accounts. At
Use the following information for questions 6-8:
Jackson Corporation uses the aging of accounts receivable approach (allowance method) to estimate uncollectible accounts. At year-end (Dec. 31), the chief accountant, has given you the following information to make the adjusting entry to estimate uncollectible accounts this year.
Management believes the following percentages for bad debt are accurate for this year:
Aging Analysis of Accounts Receivable
| NOT YET DUE | 1-30 DAYS PAST DUE | 31-60 DAYS PAST DUE | 61-90 DAYS PAST DUE | OVER 90 DAYS PAST DUE | |
| Accounts receivable balances | $100,000 | $40,000 | $30,000 | $20,000 | $10,000 |
| Percentage estimated uncollectible | 2% | 5% | 10% | 20% | 50% |
How much would the adjustment to estimate uncollectible been for if the balance in the Allowance for Doubtful Account had been a $1,200 credit balance before the adjustment?
| a. | $14,800 | |
| b. | $21,600 | |
| c. | $18,200 | |
| d. | $10,100 |
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The Organisational Change Audit
Authors: Ralph Houston
1st Edition
1907766014, 978-1907766015
