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Value Packing Company uses the aging of accounts receivable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the
Value Packing Company uses the aging of accounts receivable method to estimate Bad Debt Expense. The balance of each account receivable is aged on the basis of three categories as follows: (1) 1-30 days old, . Based on experience, management has estimated the portion of receivables of a specific age will not be paid as follows: (1) 1%, (2) 15%, and (3) 40%, respectively. At December 31, 2019, the unadjusted credit balance in the Allowance for Doubtful Accounts was $100. The total A/R in each age category were: (1) 1-30 days old, $65,000, (2) 31-90 days old, $7,000, and (3) 91+ days old, $3,000. Required: Part a. Calculate the estimate of uncollectible accounts at December 31, 2019 Part b. Prepare the appropriate adjusting journal entry dated December 31, 2019
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