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Exercise 7-8 Percent of receivables method LO P3 Daley Company estimates uncollectible accounts using the allowance...


Exercise 7-8 Percent of receivables method LO P3 Daley Company estimates uncollectible accounts using the allowance method at
Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in Allo
Exercise 7-8 Percent of receivables method LO P3 Daley Company estimates uncollectible accounts using the allowance method at December 31. It prepared the following aging of receivables analysis Days Past Due Total 5620,000 0 $406,000 1 to 30 $100,000 3% 31 to 60 $46,000 61 to 90 $28,000 1 Over 90 $40,000 115 Accounts receivable Percent uncollectible a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method. b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,000 credit. c. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $2.000 debit. Complete this question by entering your answers in the tabs below. Red Band Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method Em balance of wrance for uncollectibles Reg Band C >
Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $3,800 credit. Prepare the adjusting entry to record bad debts expense using the estimate from part a. Assume the unadjusted balance in Allowance for Doubtful Accounts is a $300 debit. L38 soints View transaction list Journal entry worksheet Is da ju Record estimated bad debts assuming that Allowance for Doubtful Accounts has a $3,800 credit balance. Date Credit General Journal bad debts expense Allowance for doubtful accounts Debit 20.120 Dec 31 20.120 Chery View general journal < Reg A
0 0
Report
Answer #1

a) Schedule

0 1 to 30 31 to 60 61 to 90 Over 90 Total
Account receivable 406000 100000 46000 28000 40000 620000
% Uncollectible 2% 3% 6% 8% 11%
$ Uncollectible 8120 3000 2760 2240 4400 20520

b) Adjusting entry

date account and explanation Debit Credit
Dec 31 bad debt expense (20520-3800) 16720
Allowance for doubtful accounts 16720

c) Adjusting entry

date account and explanation Debit Credit
Dec 31 bad debt expense (20520+300) 20820
Allowance for doubtful accounts 20820
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