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Daley Company prepared the following aging of receivables analysis at December 31. Exercise 98 Days Post...


Daley Company prepared the following aging of receivables analysis at December 31. Exercise 98 Days Post TO P3 11 30 31 61 90
Daley Company prepared the following aging of receivables analysis at December 31. Exercise 98 Days Post TO P3 11 30 31 61 90 Oro 5570.000 $395.000 590.000 50.000 $13.000 Accounts receivable Percent collect $30.000 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 purta. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a 5100 debit.
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a Estimate balance of the allowance for Doubtful accounts using ageing of account receivable
Days past Due Amount Receivable Percent uncollectible Amount Uncollectible
0 $3,96,000 1% $3,960
1 to 30 $90,000 2% $1,800
31 to 60 $36,000 5% $1,800
61 to 90 $18,000 7% $1,260
over 90 $30,000 10% $3,000
Total $5,70,000 $11,820
b Journal Entry
Date Account and Explanation Debit Credit
Dec-31 Bad debts Expense Dr $8,220
       Allowance for doubtful accounts $8,220
( to adjust the allowance account from $ 3600
to target balance of   $ 11820 )
c Journal Entry
Date Account and Explanation Debit Credit
Dec-31 Bad debts Expense Dr $11,920
       Allowance for doubtful accounts $11,920
( to adjust the allowance account from $ 100(debit)
to target balance of   $ 11820 )
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