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)
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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