Question

(a) The aging of Torme Designs' accounts receivable is shown below. Calculate the amount of each periodicity range that is deemed to be uncollectible.

?

		Est. Uncollectible Accts.
Age Interval	Balance	Percentage	Amount
Not past due	850,000	3.50%
1-30 days past due	47,500	5.00%
31-60 days past due	21,750	10.00%
61-90 days past due	11,250	20.00%
91-180 days past due	5,065	30.00%
181-365 days past due	2,500	50.00%
Over 365 days past due	1,145	95.00%
Total	939,210

?

(b)  If the Allowance for Doubtful Accounts has a credit balance of $1,135.00, record the adjusting entry for
the bad debt expense for the year.

Answer 1

(a)

		Est. Uncollectible Accts.
Age Interval	Balance	Percentage	Amount
Not past due	850000	3.50%	29750
1-30 days past due	47500	5.00%	2375
31-60 days past due	21750	10.00%	2175
61-90 days past due	11250	20.00%	2250
91-180 days past due	5065	30.00%	1519.5
181-365 days past due	2500	50.00%	1250
Over 365 days past due	1145	95.00%	1087.75
Total	939210		40407.25

(b)

Uncollectable account expanses

=40,407.25-1135

=$39,272.25

Description	Debit $	Credit $
Uncollectable account expanses	39272.25
Allowance for Doubtful account		39272.25