Question

Required information [The following information applies to the questions displayed below.] On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,500. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable $ 880,000 352,000 70,400 35,200 14,080 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 1.35% 2.10 6.60 33.25 69.00 Required: 1. Compute the required balance of the Allowance for Doubtful Accounts at December 31 Accounts Receivable Percent Uncollectible (.08%) Estimated Uncollectible Not due 1 10 30 31 to 60 61 to 90 Over 90 Estimated balance of allowance for uncollectibles

Answer 1

Solution of one independent question
JARDEN COMPANY
Part 1 - Aging schedule
	Amount	Allowance %	Allowance needed
Not yet due	880000	1.35%	11880
1 - 30 days	352000	2.10%	7392
31 - 60 days	70400	6.60%	4646.4
61 - 90 days	35200	33.25%	11704
Over 90 days	14080	69%	9715.2
	1351680		45337.6	( total estimated uncollectibles )
Now,
Required balance or appropriate balance in allowance for doubtful debts at year end = 45338 ( credit )
Available balance = 14500 ( credit )
Adjustment needed = 45338 - 14500 = 30838 ( credit )
The amount of bad debt expense to be recorded = 30838
Adjusting entry
Bad debt exp.	30838
Allowance for doubtful debts		30838
Part 3
Write off entry
Allowance for doubtful debts	5300
Accounts receivable		5300
Affects jarden net income :- No
Since it affects only balance sheet accounts.
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