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Daley Company prepared the following aging of receivables analysis at December 31. Exercise 9-8 Aging of...

Daley Company prepared the following aging of receivables analysis at December 31. Exercise 9-8 Aging of receivables method P

Daley Company prepared the following aging of receivables analysis at December 31. Exercise 9-8 Aging of receivables method P3 Days Past Due Total 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable............. Percent uncollectible ....... $570,000 $396,000 $90,000 2% $36,000 5% $18,000 7% $30,000 1% 10% a. Estimate the balance of the Allowance for Doubtful Accounts using aging of accounts receivable 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 $3,600 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 $100 debit.
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Answer #1

Part a

Accounts Receivable Percent uncollectible
Not due 396000 1% 3960
1 to 30 90000 2% 1800
31 to 60 36000 5% 1800
61 to 90 18000 7% 1260
Over 90 30000 10% 3000
Allowance for doubtful accounts 11820

Part b

Date Particulars Debit Credit
31-Dec Bad debt expense (11820-3600) 8220
Allowance for doubtful accounts(11820-3600) 8220
( Being adjustment entry for bad debt expense)

Part C

Date Particulars Debit Credit
31-Dec Bad debt expense (11820-100) 11720
Allowance for doubtful accounts(11820-100) 11720
( Being adjustment entry for bad debt expense)
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