Question

Oriole Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance...

Oriole Company uses the allowance method to estimate uncollectible accounts receivable. The unadjusted balance in Allowance for Doubtful Accounts is a debit of $4,000.

The company produced the following information from aging its accounts receivable at year end. Complete the aging schedule and calculate the total estimated uncollectible accounts.

a.)

Number of Days Outstanding
Total 0–30 31–60 61–90 91–120
Accounts receivable $670,000 $320,000 $170,000 $130,000 $50,000
Estimated % uncollectible 3% 6% 10% 30%
Estimated uncollectible accounts $ 47800 $ 9600 $10200 $13000

1.) Record the bad debt adjusting entry using the information determined in part (a)

Homework Answers

Answer #1
Number of Days Outstanding
Total 0–30 31–60 61–90 91–120
Accounts receivable $670,000 $320,000 $170,000 $130,000 $50,000
Estimated % uncollectible 3% 6% 10% 30%
Estimated uncollectible accounts $47,800 $9,600 $10,200 $13,000 $15,000

Total estimated uncollectible accounts = $ 47,800

Bad Debt expense = Allowance for doubtful accounts, ending + Un adjusted Allowance for doubtful accounts

= 47,800 + 4,000

= $ 51,800

General Journal Debit Credit
Bad Debt Expense $ 51,800
Allowance for doubtful accounts $ 51,800
(To record bad debt expense)

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