Q2
Timber Company has given you the following information from its aging of accounts receivable. Using this information, determine the ending balance of the allowance for doubtful accounts and prepare the journal entry to record bad debt expense.
Current amount in the allowance for doubtful accounts is a $958 credit.
Current |
$24,400 |
2% uncollectible |
31-60 days |
7,350 |
8% uncollectible |
61-90 days |
3,380 |
15% uncollectible |
91 and up |
1,220 |
30% uncollectible |
Number of Days |
Receivables |
||
Past Due |
Amount |
% uncollectible |
Uncollectible amount |
Current |
$24,400 |
2% |
$488 |
31-60 |
$7,350 |
8% |
$588 |
61-90 |
$3,380 |
15% |
$507 |
Over 90 |
$1,220 |
30% |
$366 |
Adjusted balance required of Allowance for Doubtful Account (A) |
$1,949 |
||
Unadjusted balance in the Allowance account (B) |
$958 |
||
Bad Debt expense for Year : (A - B) |
$991 |
>the ending balance of the allowance for doubtful accounts = $ 1949 Credit
>adjusting entry
Accounts title |
Debit |
Credit |
Bad Debt Expense |
$991 |
|
Allowance for Doubtful account |
$991 |
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