Question

D & A Company uses the aging of accounts receivable approach to estimate bad debt expense....

D & A Company uses the aging of accounts receivable approach to estimate bad
debt expense.
On December 31, 2019, an analysis of accounts receivable revealed the following:
Schedule of accounts receivable by age
Accounts receivable, Dec 31 Age of Accounts receivable Estimated percentage of
uncollectible
$130,000 Not yet due 0.75%
45,000 1-30 days past due 4%
9,000 31-60 days past due 10%
4,000 61-90 days past due 60%
2,000 Over 90 days past due 90%
Required:
a) Calculate the amount of allowance for doubtful accounts that should be reported on
the balance sheet at December 31, 2019
b) Calculate the amount of bad debts expense that should be reported on the 2019
income statement, assuming that the balance of Allowance for Doubtful Accounts on
January 1 was $44,000 (credit balance) and accounts receivable written off during the
year totaled $49,200. Prepare all necessary journal entries
c) Calculate bad debts expense on December 31, 2019. Prepare the journal entry
d) Show how accounts receivable will appear on the balance sheet at December 31,
2019

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