Question

Following is a list of credit customers along with their amounts owed due and the days past due at December 31. Following that list are five classifications of accounts receivable and estimated bad debts percent for each class.

	Days Past Due
	0			1 to 30				31 to 60				61 to 90				Over 90
Percent uncollectible		2	%			4	%			6	%			9	%			13	%

Customer	Accounts Receivable			Days Past Due
BCC Company	$	4,300			11
Lannister Co.		1,300			0
Mike Properties		5,300			112
Ted Reeves		600			76
Jen Steffens		2,300			38

1. Create an aging of accounts receivable schedule of accounts receivable by age similar to the table given above. Calculate the estimated balance for the Allowance for Doubtful Accounts.

2. Assuming an unadjusted credit balance of $130, record the required adjustment to the Allowance for Doubtful Accounts.

Answer 1

• Requirement 1

Customer	Accounts	Days Past	Percent	Amount estimated
	Receivable	Due	uncollectible	to be uncollectible
BCC Company	$4,300	11	4%	$172
Lannister Co.	$1,300	0	2%	$26
Mike Properties	$5,300	112	13%	$689
Ted Reeves	$600	76	9%	$54
Jen Steffens	$2,300	38	6%	$138
Estimated balance for Allowance for Doubtful accounts				$1,079

• [2]

Accounts title	Debit	Credit
Bad Debt Expense	$949
Allowance for Doubtful accounts($1079 -130 credit balance existing)		$949